Glamour, value, and the form of takeover

The distinction between tender offers and mergers has important shareholder wealth implications, as the takeover literature shows. However, the factors associated with tender offers and mergers are not fully understood. We examine how firms' glamour versus value status and ownership structure influence tender offer versus merger form. Our results show that tender offers are not simply a function of method of payment. Tender offers are more likely for value firms and for targets with high institutional ownership. In cash offers, tender offers are less likely for glamour targets, and in stock offers, tender offers are less likely for glamour acquirers.