Henry Manne, modern takeover theory

[jrobertr]

One of the fathers of modern takeover theory is Henry Manne, who published "Mergers and the Market for Corporate Control" in 1965. In this seminal work, Manne proposes the (now commonly accepted) notion that poorly run firms are natural takeover targets because their market values will be depressed, permitting acquirers to earn larger returns by running the firms successfully.

Has anyone read any of his books? His name/theories came up in a capital budgeting; M&A section of a course I am taking, and really intrigued me. The concept of synergy makes me want to join the Corporate Raiders of the 80's!

 

[jrobertr]

During the class lecture, the concept of synergy is what most interested me. It is my understanding that the book talks about all different types of them, along with other reasons for M&A.

Examples of synergy from aquiring a firm; cost cutting with combined manufacturing plants, paying 1 CEO instead of 2 (apply to various exec/general labor positions), ordering larger quantities at cheaper prices. To me, its finding ways to increase margins and with the combined revenue, which leads to higher profits! The list goes on and on...

I will probably pick up one of the books later this week.