Price and Probability: Decomposing the Takeover Effects of Anti-Takeover Provisions

Maria Guadalupe, Cuñat, Vicente and Mireia Gine
Authors registered in the RePEc Author Service: Vicente Cuñat

No 12059, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the causal effects of anti-takeover provisions on takeovers. We decompose their effect on prices, takeover likelihood and target selection and explore the channels through which they change shareholders’ value. We provide causal estimates based on shareholder proposals and deal with the endogenous selection of targets through bounding techniques. Voting to remove an anti-takeover provision increases the annual takeover probability by 0.9% and increases premiums by 2.8%. The premium effect is driven by more related acquisitions, better matching and higher synergies when targets are less protected. We do not find evidence of a trade-off between premiums and takeover probabilities.

Date: 2017-05
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Price and Probability: Decomposing the Takeover Effects of Anti‐Takeover Provisions (2020)
Working Paper: Price and probability: decomposing the takeover effects of anti-takeover provisions (2020)
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