The Journal of Finance· 2026Q1
The Evolution of the Market for Corporate Control
- 2citations
- Q1SCImago
- 2026year
Short summary
Takeover activism, where a large shareholder initiates a sale to an acquirer, is increasingly replacing direct takeovers as the primary method for corporate control changes.
AI-generated from the title and abstract; the full text is not read.
Key points
- Takeover activism complements direct takeovers by reducing asymmetric information.
- Activism is becoming the prevailing mode of disciplinary control change as investor participation grows.
- The evolution is driven by a symbiotic relationship between investor activism and private equity.
- Intermediated transactions are key to overcoming information and collective action problems.
AI-generated from the title and abstract; the full text is not read.
Abstract
ABSTRACT We consider an informed large shareholder who can choose between making a takeover bid herself and initiating a sale to another acquirer. Such takeover activism complements direct takeovers because the very choice mitigates the asymmetric information problem, thereby improving efficiency. As more investors enter the market for corporate control, takeover activism increasingly replaces direct takeovers as the prevailing mode of disciplinary control change, matching the evolution in practice. Our model shows how this evolution, characterized by a symbiotic relationship between investor activism and private equity, arises to overcome asymmetric information and collective action problems through intermediated transactions.
The authors' abstract, as published at the source. The Journal of Finance, 2026 · DOI ↗
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