Prior studies have observed that excessively high takeover premiums are paid in takeover offers for publicly listed firms. We argue that these premiums are a form of agency costs between shareholders and managers of the bidder. Consistent with prior research we argue that a strong blockholder can better control managers which results in lower agency costs and lower takeover premiums. However, this blockholder view is too simplistic because blockholders differ regarding their objectives. Specifically, drawing on the behavioral agency model, we hypothesize that family blockholders employ ‘loss aversion’ and ‘problem framing’ in the takeover context. Our empirical results support our hypotheses based on a sample of 139 public takeover offers. Most importantly, bidders with a family blockholder offer lower premiums than bidders with any other kind of blockholder or bidders without blockholders.