Vicente Cuñat, Mireia Giné, MARIA GUADALUPE Price and Probability: Decomposing the Takeover Effects of Anti-Takeover Provisions (01 Aug 2016) Available at ECGI: http://ecgi.global/working-paper/price-and-probability-decomposing-takeover-effects-anti-takeover-provisions
This paper studies the effects of anti-takeover provisions on takeovers and identifies the channels through which they create or destroy value for firms, as well as for the economy as a whole. We provide causal estimates ? that also deal with the endogenous selection of targets ?
showing that voting to remove an anti-takeover provision increases the takeover probability by 4.5% and garners a 2.8% higher premium, which results from increased competition for less protected targets. We also find evidence of net value creation in the economy stemming from more related acquisitions and targets being matched to more valuable acquirers.
This paper investigates whether non-executive directors associated with good (bad) board decisions are subsequently rewarded (penalized) in the market for directors. This question is addressed by assessing whether the post-acquisition performance...Read more
We examine an extensive matched sample of U.S. dual and single class firms in 1980-2015 from the time of their IPO, and document that the valuation difference between dual and single class firms varies along their life cycle. On average, at the...Read more
At the core of agency problems in widely held firms is a dual coordination failure: Dispersed shareholders neither share in the cost of governance interventions (ex post free riding) nor sell shares unless the price at least matches the...Read more
We show theoretically and empirically that managers have steeper financial incentives to exert effort and reduce costs when an industry's firms are controlled by shareholders with concentrated stakes in the firm, and relatively few holdings in...Read more