Abstract

http://ssrn.com/abstract=1785364
 
 

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Corporate Governance and the Nature of Takeover Resistance


Nicholas F. Carline


University of Birmingham - Birmingham Business School

Scott C. Linn


University of Oklahoma - Michael F. Price College of Business

Pradeep K. Yadav


University of Oklahoma Price College of Business

March 23, 2014

American Finance Association Meetings Working Paper

Abstract:     
We investigate the relation between corporate governance characteristics of hostile takeover targets and the choice to employ ‘harmful’ resistance that is not perceived as being motivated by shareholders’ interests. We find that harmful resistance is associated with firms where managers have more pronounced ownership-based and age-related incentives for control, and directors have equity interests less aligned to stockholders. These firms also have less independent boards, are exposed to weaker discipline from outside blockholders, and are inferior performers. In the presence of harmful resistance, the market is less optimistic about the chances of bid completion, and there is a greater likelihood of managerial turnover.

Number of Pages in PDF File: 47

Keywords: Takeover bid; Resistance; Corporate Governance; C.E.O. turnover

JEL Classification: G34


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Date posted: March 16, 2011 ; Last revised: March 24, 2014

Suggested Citation

Carline, Nicholas F. and Linn, Scott C. and Yadav, Pradeep K., Corporate Governance and the Nature of Takeover Resistance (March 23, 2014). American Finance Association Meetings Working Paper. Available at SSRN: http://ssrn.com/abstract=1785364 or http://dx.doi.org/10.2139/ssrn.1785364

Contact Information

Nicholas F. Carline
University of Birmingham - Birmingham Business School ( email )
Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom
Scott C. Linn (Contact Author)
University of Oklahoma - Michael F. Price College of Business ( email )
307 West Brooks
Norman, OK 73019-4004
United States
405-325-3444 (Phone)
405-325-1957 (Fax)
Pradeep K. Yadav
University of Oklahoma Price College of Business ( email )
307 W.Brooks, Room 205A Division of Finance
Norman, OK 73019
United States
4053256640 (Phone)
4053255491 (Fax)
HOME PAGE: http://www.ou.edu/price/finance/faculty/pradeep_yadav.html
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