Non‐executive directorship importance and takeover hostility: Australian evidence

Chistopher Day, Martin Bugeja, Helen Spiropoulos and Zoltan Matolcsy

Accounting and Finance, 2023, vol. 63, issue 1, 769-793

Abstract: This study investigates the importance of the target firm directorship to target firm non‐executive directors during takeovers. Using Australian data and a size‐based measure of directorship importance, we find a positive association between takeover hostility and directorship importance after controlling for takeover premiums and target firm size. Further analysis reveals that directorship importance leads to a greater likelihood of offer price revisions following initial rejection of a takeover bid, but not the likelihood of bid success. Our findings are consistent with target firm non‐executive directors exhibiting self‐serving behaviour at directorships which they consider more important to their reputation.

Date: 2023
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https://doi.org/10.1111/acfi.12952

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