Shareholder approval thresholds in acquisitions: Evidence from tender offers

Audra Boone, Brian Broughman and Antonio J. Macias

Journal of Corporate Finance, 2018, vol. 53, issue C, 225-245

Abstract: We exploit a 2013 Delaware law that reduces the shareholder support threshold for two-step tender offers to investigate the impact of differing levels of shareholder support on deal structures and outcomes. After the legal change, Delaware acquisitions, as opposed to other states, are more likely to be completed via tender offer, and Delaware targets collectively receive greater acquisition premiums and returns relative to firms incorporated in other states. Our results caution that supermajority shareholder approval thresholds can increase the risk of shareholder holdup and have little (if any) effect on managerial self-dealing.

Keywords: Shareholder voting; Tender offer; Mergers; Acquisitions; Delaware law (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:53:y:2018:i:c:p:225-245

DOI: 10.1016/j.jcorpfin.2018.10.005

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