Pre-Tender Offer Share Acquisition Strategy in Takeovers

This paper models the strategic pre-tender offer share acquisition problem faced by po? tential bidders in takeovers. The model provides a rational explanation for the seemingly anomalous empirical evidence that the information about the impending tender offers is not fully conveyed through the potential bidders' pre-tender offer trades and for the evidence that a large fraction of bidders do not hold any target shares prior to launching the tender offers. Additional testable implications are also pro