Do you agree or disagree with this? Why or why not?

For the firm that is purchasing the target firm, they could be destroying shareholder value through overpaying for the target firm. Whether it's due to market conditions or to prevent the hostile takeover of another firm, the acquiring corporation may pay too high of a premium in the merger that leaves the target corporation enriched while reducing the earnings per share of the acquiring firm. This is especially true if the firm is issuing more equity to raise capital for the buyout. In these circumstances, the pool of shareholder agency is reduced as voting rights become diluted. An example of a less$-$then ideal merger would be when Time Inc. tried to merge with Warner Communications. While talks were underway between the two firms, Paramount Communications attempted a hostile takeover of Time Inc. by launching tender offers that reached double of what the Time Inc. shares were worth at the time. To avoid being taken over, the executives of Time Inc. proceeded to change its merger into an acquisition of Warner and bought them at a high premium. This event let the executives keep their positions but ended up tanking the market price of their stock and left shareholders worse off.