Corporate control activism
Adrian Aycan Corum and
Journal of Financial Economics, 2019, vol. 133, issue 1, 1-17
This paper studies the role of activist investors in the market for corporate control. Our theory proposes that activist investors have an inherent advantage relative to bidders in pressuring entrenched incumbents to sell. As counterparties to the acquisition, bidders have a fundamental conflict of interests with target shareholders from which activist investors are immune. Therefore, unlike activists, the ability of bidders to win proxy fights is very limited. This result is consistent with the large number of activist campaigns that have resulted with the target’s sale to a third party and the evidence that most proxy fights are launched by activists, not by bidders.
Keywords: Acquisition; Corporate governance; Proxy fight; Shareholder activism; Takeover (search for similar items in EconPapers)
JEL-codes: D74 D83 G23 G32 G34 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:133:y:2019:i:1:p:1-17
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