Abstract

http://ssrn.com/abstract=1785364
 
 

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The Nature of Takeover Resistance: Aggressive Post-Offer Actions to Frustrate Takeover Bids vs. Passive 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

February 29, 2016

American Finance Association Meetings Working Paper

Abstract:     
We examine the nature of takeover resistance by investigating the determinants of the choice by target managers to take post-offer actions designed to aggressively frustrate the takeover bid, in preference to choosing passive resistance through tactics that just secure a better offer for shareholders. We find that target firm governance and bidder offer characteristics significantly influence the choice in a manner consistent with takeover ‘frustrating actions’ being motivated by managerial entrenchment. We also find that, relative to passive resistance, frustrating actions negatively impact stockholder payoffs and increase the likelihood of CEO turnover, irrespective of whether the resisted bid succeeds.

Number of Pages in PDF File: 55

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 2, 2016

Suggested Citation

Carline, Nicholas F. and Linn, Scott C. and Yadav, Pradeep K., The Nature of Takeover Resistance: Aggressive Post-Offer Actions to Frustrate Takeover Bids vs. Passive Resistance (February 29, 2016). 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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