Do anti-takeover devices affect the takeover likelihood or the takeover premium?

Martin Holmén, Eugene Nivorozhkin, Rakesh Rana

Research output: Contribution to journalArticleScientificpeer-review

3 Citations (Scopus)

Abstract

In this paper we use Heckman selection models to analyse the relation between the likelihood of the firm becoming a takeover target, the takeover premium, and the use of anti-takeover devices. Ordinary least squares regressions suggest that anti-takeover devices, especially dual class shares, are associated with a higher takeover premium. However, we also document that anti-takeover devices reduce the likelihood that the firm will be taken over. When we control for the fact that takeover targets are selected, we do not find a significant relation between the takeover premium and dual class shares. Hence, our results suggest that the takeover premium is indeed influenced by private information about the likelihood of takeover.
Original languageEnglish
Peer-reviewed scientific journalThe European Journal of Finance
Volume20
Issue number4
Pages (from-to)319-340
Number of pages22
ISSN1351-847X
DOIs
Publication statusPublished - 2014
MoE publication typeA1 Journal article - refereed

Keywords

  • 511 Economics
  • KOTA2012

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