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Takeover threats, antitakeover amendments and stock price reaction
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This paper examined the influence of takeover threats on the stock price of firms proposing antitakeover amendments and found that shareholders of the average firm are not harmed by such threats because they provide either a better bargaining position or an information signal to the market.Abstract:
We examine the influence of takeover threats on the stock price of firms proposing antitakeover amendments. Stock prices of the majority of firms, which are not takeover targets during the four years surrounding the amendments, are unaffected, while prices of firms that become takeover targets within two years increase significantly. We document weak evidence of wealth losses only for a sample of prior targets. Our findings suggest that shareholders of the average firm are not harmed by antitakeover amendments because they provide either a better bargaining position or an information signal to the market.read more
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Board structure, antitakeover provisions, and stockholder wealth
TL;DR: In this article, regression analyses from a sample of 261 firms that adopted 486 antitakeover provisions (supermajority, classified boards, fair price, reduction in cumulative voting, antigreenmail and poison pills) in the 1984-88 period indicate that the negative market reactions to antitake-over provisions vary depending on firms' board structures.
Posted Content
The effects of corporate antitakeover provisions on long-term investment: empirical evidence
TL;DR: In this article, the authors use agency theory to devise more refined empirical test of the effects of the adoption of antitakeover provision adoptions by managers in firms with different incentive and monitoring structures.
Journal ArticleDOI
The effects of corporate antitakeover provisions on long-term investment : empirical evidence
TL;DR: In this article, the authors use agency theory to devise more refined empirical tests of the effects of the adoption of antitakeover provision adoption by managers in firms with different incentive and monitoring structures.
Journal ArticleDOI
Antitakeover Provisions and Shareholder Value Implications: A Review and a Contingency Framework
TL;DR: In this article, the authors review literatures on the two competing theoretical views of the antitakeover provisions and propose a contingency framework to reconcile these views, based on a broader agency theory perspective and the organizational literatures of power.
Journal ArticleDOI
Agency, bid resistance and the market for corporate control
Peter Holl,Dimitris Kyriazis +1 more
TL;DR: In this paper, the authors investigated the effect of management resistance to a takeover bid on the overall wealth gains associated with the bid and the probability of successful bid success in the UK.
References
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Journal ArticleDOI
Using daily stock returns: The case of event studies
TL;DR: In this paper, the authors examine properties of daily stock returns and how the particular characteristics of these data affect event study methodologies and show that recognition of autocorrelation in daily excess returns and changes in their variance conditional on an event can sometimes be advantageous.
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Measuring security price performance
TL;DR: In this article, observed stock return data are employed to examine various methodologies which are used 111 event studies to measure security price performance, and abnormal performance is introduced into this data and misuse of any of the methodologies can result in false inferences about the presence of abnormal performance.
Journal ArticleDOI
Estimating betas from nonsynchronous data
Myron S. Scholes,Joseph Williams +1 more
TL;DR: In this article, the observed market model and associated ordinary least squares estimators are developed in detail, and computationally convenient, consistent estimators for parameters of the market model are calculated and then applied to daily returns of securities listed in the NYSE and ASE.
Journal ArticleDOI
Managerial control of voting rights: Financing policies and the market for corporate control
TL;DR: The authors analyzes how managerial control of voting rights affects firm value and financing policies and shows that an increase in the fraction of voting votes controlled by management decreases the probability of a successful tender offer and increases the premium offered if a tender offer is made.
Journal ArticleDOI
Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firms
TL;DR: In this paper, the authors provide a theoretical analysis of the process of competition for control of the target and empirical evidence that competition among bidding firms increases the returns to targets and decreases the return to acquirers, and that the supply of target shares is positively sloped.
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