Corporate argumentation in takeover bids

287 Pages·2014·2.78 MB·English

by  Rudi Palmieri

Corporate Argumentation in Takeover Bids
Argumentation in Context (AIC)
This book series highlights the variety of argumentative practices that have become
established in modern society by focusing on the study of context-dependent
characteristics of argumentative discourse that vary according to the demands of the
more or less institutionalized communicative activity type in which the discourse
takes place. Examples of such activity types are parliamentary debates and political
interviews, medical consultations and health brochures, legal annotations and judicial
sentences, editorials and advertorials in newspapers, and scholarly reviews and essays.
For an overview of all books published in this series, please see
http://benjamins.com/catalog/aic
Editors
Frans van Eemeren Bart Garssen
ILIAS & Leiden University ILIAS & University of Amsterdam
& University of Amsterdam
Editorial Board
Mark Aakhus Eddo Rigotti
Rutgers University University of Lugano
Marianne Doury Sara Rubinelli
CNRS Paris ILIAS, Swiss Paraplegic Research &
University of Lucerne
Eveline Feteris
University of Amsterdam Takeshi Suzuki
Meiji University
G. Thomas Goodnight
University of Southern California Giovanni Tuzet
Bocconi University
Cornelia Ilie
Zayed University, Abu Dhabi David Zarefsky
Northwestern University
Sally Jackson
University of Illinois at Urbana-Champaign Gábor Zemplén
Budapest University of Technology
Manfred Kienpointner
and Economic
University of Innsbrueck
Volume 8
Corporate Argumentation in Takeover Bids
by Rudi Palmieri
Corporate Argumentation
in Takeover Bids
Rudi Palmieri
USI-University of Lugano
John Benjamins Publishing Company
Amsterdam / Philadelphia
TM The paper used in this publication meets the minimum requirements of
8
the American National Standard for Information Sciences – Permanence
of Paper for Printed Library Materials, ansi z39.48-1984.
Library of Congress Cataloging-in-Publication Data
Palmieri, Rudi.
Corporate Argumentation in Takeover Bids / Rudi Palmieri.
p. cm. (Argumentation in Context, issn 1877-6884 ; v. 8)
Includes bibliographical references and index.
1. Tender offers (Securities) 2. Consolidation and merger of corporations. 3. Persuasion
(Rhetoric) 4. Discourse analysis. I. Title.
HG4028.T4P35 2014
338.8’3014--dc23 2014024706
isbn 978 90 272 1125 5 (Hb ; alk. paper)
isbn 978 90 272 6946 1 (Eb)
© 2014 – John Benjamins B.V.
No part of this book may be reproduced in any form, by print, photoprint, microfilm, or any
other means, without written permission from the publisher.
John Benjamins Publishing Co. · P.O. Box 36224 · 1020 me Amsterdam · The Netherlands
John Benjamins North America · P.O. Box 27519 · Philadelphia pa 19118-0519 · usa
To my family
and to the memory of Giorgio Salvadè

Table of contents
Acknowledgements ix
chapter 1
Introduction 1
1.1 The argumentative dimension of corporate takeovers 1
1.2 Objective of the study and research questions 3
1.3 The UK takeover market 8
1.4 Structure of the book 9
chapter 2
The argumentative intervention in context: Theoretical concepts
and analytical instruments 13
2.1 Argumentation as a context-situated communicative activity 13
2.1.1 The argumentative situation 13
2.1.2 Inference, dialectic and rhetoric 17
2.1.3 Comparison with the main approaches to corporate financial
communication 21
2.2 Building an analytical toolkit for the reconstruction of contextualized
argumentative interactions 25
2.2.1 The four stages of an ideal critical discussion and its empirical
counterparts 25
2.2.2 The Argumentum Model of Topics 30
2.2.3 Linking the analytic overview to the inferential configuration 36
chapter 3
Eliciting argumentative situations in takeover bids 43
3.1 The takeover transaction and its main phases 44
3.2 Argumentative exigencies of the bidder and the target directors 50
3.2.1 The desirability of a takeover from the bidder’s perspective 50
3.2.2 The position of the target directors 59
3.2.3 Argumentation in pre-offer negotiations: A case in point 61
3.2.1 Possible outcomes of the pre-offer phase 63
3.3 The audience of the directors’ argumentative discourse 64
3.3.1 A complex interaction field 65
3.3.2 Shareholders: The decision-makers 67
iii Corporate argumentation in takeover bids
3.3.3 Financial analysts and journalists as secondary audiences 71
3.3.4 The communicative role of non-financial stakeholders 73
3.4 Argumentatively relevant constraints in takeover regulation 74
3.4.1 Raison d’être of takeover regulation in the UK context 75
3.4.2 Announcements and documents from the bidder 78
3.4.3 The target Board’s reasoned opinion 80
3.4.4 The setting up and disciplining of two argumentative
interaction schemes 81
3.5 A more comprehensive model of the takeover process 85
chapter 4
The offer procedure as an argumentative activity a type 89
4.1 Case selection and procedure for the argumentative analysis 90
4.2 Speech events of the offer period 93
4.3 Macro-analysis of the main text typologies 96
4.3.1 The firm intention announcement and the offer document 97
4.3.2 The defense document 100
4.4 Argumentative characteristics in the communicative interactions
of the offer period 103
4.4.1 The initial situation 103
4.4.2 Starting points 107
4.4.3 Argumentative means 112
4.4.4 Possible outcomes 115
4.5 Friendly and hostile offers as kindred argumentative activity types 117
chapter 5
The argumentative coordination in friendly offers 123
5.1 The target Board’s justification of the recommendation 123
5.1.1 Justifying the recommendation by explaining a decision 126
5.1.2 Preparing for the argumentation stage in the offer’s
description 130
5.1.3 Backgrounding the recommendation to dispel adverse
implications 134
5.1.4 Combining financial and social-organizational values 139
5.1.5 Levering on the means of payment for topical choices 145
5.2 The bidder’s justification of the envisaged acquisition 152
5.2.1 Renouncing to declare the main standpoint 152
5.2.2 Showing coherence with the announced corporate strategy 154
5.2.3 Presenting the combination as a happy joint action 158
5.3 Directors’ co-protagonism as the friendly offer’s strategic
maneuvering 161
Table of contents ix
chapter 6
The argumentative opposition in hostile bids 169
6.1 The hostile bidder’s argumentative approach 169
6.1.1 Assuming an advisory role 169
6.1.2 The offer price as one component of a win-win deal 175
6.1.3 An opportunity to realize the investment 182
6.2 The target defense strategy 184
6.2.1 Framing the bid as a malevolent act 184
6.2.2 Focusing the topical choice on financial aspects 185
6.2.3 Price inadequacy and good standalone prospects:
A strategic ambiguity? 191
chapter 7
Refuting the endoxical basis of the opposite argumentation 197
7.1 Strategic maneuvers in the discussions over the adequacy
of the offer price 197
7.1.1 Criticizing the assumptions behind relative valuation 200
7.1.2 Questioning expert opinions 207
7.2 Arguing for a particular interpretation of managers’ past actions 212
chapter 8
Conclusion 219
8.1 Review and assessment of the main findings 220
8.1.1 The takeover bid as an argumentative context 220
8.1.2 The bidder and the target board’s argumentative strategies 225
8.2 On financial communication 234
8.3 Open questions for future research 237
References 241
Index of figures 257
Annex 1: List of cases and relevant information 261
Name index 267
Subject index 271