The evolution of the market for corporate control

Burkart, Mike ORCID: 0000-0002-0954-4499, Lee, Samuel and Voss, Paul (2025) The evolution of the market for corporate control. Journal of Finance. ISSN 0022-1082 (In Press)

Text (JF_Burkart Lee Voss Evolution) - Accepted Version Pending embargo until 1 January 2100. Available under License Creative Commons Attribution. Download (1MB)

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 such an evolution, characterized by a symbiotic relationship between investor activism and private equity, arises to overcome asymmetric information and collective action problems through intermediated transactions.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	Finance
Subjects:	H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Date Deposited:	15 Sep 2025 09:36
Last Modified:	15 Sep 2025 09:45
URI:	http://eprints.lse.ac.uk/id/eprint/129506

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