Market for corporate control

The market for corporate control is the role of equity markets in facilitating corporate takeovers. This was first described in an article by HG Manne, "Mergers and the Market for Corporate Control".^[1] According to Manne:

The lower the stock price, relative to what it could be with more efficient management, the more attractive the take-over becomes to those who believe that they can manage the company more efficiently. And the potential return from the successful takeover and revitalization of a poorly run company can be enormous.

In this way the market for corporate control could magnify the efficacy of corporate governance rules, and facilitate greater accountability of directors to their investors.^[2]

Notes

^ (1965) 73 Journal of Political Economy 110
^ "Market for Corporate Control". Econlib. Retrieved 2021-03-08.

References

Manne, Henry G. (1965). "Mergers and the Market for Corporate Control". 73 Journal of Political Economy 110
Scharfstein, D. (1988). "The Disciplinary Role of Takeovers". 55 Rev Econ Stud 85
Macey, Jonathan R. (2008). "Market for Corporate Control". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.

External links

Encycogov.com's page

Corporate finance and investment banking

Capital structure

Transactions
(terms/conditions)

Equity offerings	At-the-market offering Book building Bookrunner Bought deal Bought out deal Corporate spin-off Direct public offering Equity carve-out Follow-on offering Greenshoe Reverse Initial public offering Pre-IPO Private placement Public offering Rights issue Seasoned equity offering Secondary market offering Underwriting
Mergers and acquisitions	Buy side Contingent value rights Control premium Demerger Divestment Drag-along right Management due diligence Managerial entrenchment Mandatory offer Minority discount Pitch book Pre-emption right Proxy fight Post-merger integration Sell side Shareholder rights plan Special-purpose entity Special situation Squeeze-out Staggered board of directors Stock swap Super-majority amendment Synergy Tag-along right Takeover Reverse Tender offer
Leverage	Debt restructuring Debtor-in-possession financing Dividend recapitalization Financial sponsor Leveraged buyout Leveraged recapitalization High-yield debt Private equity Project finance