Corporate Governance and Anti-Takeover Devices: Evidence from Australia
27 Pages Posted: 11 Jul 2000
Date Written: April 2000
This paper seeks to establish what form of management structure, ownership structure and financial characteristics are exhibited by firms that propose and subsequently adopt anti-takeover charter amendments (ATCAs) in Australia. An ATCA is a restriction of partial takeover activity implemented though shareholder approval to changes in a firm's constitution. Approval for such changes is obtained through majority agreement from a plebiscite of shareholders.
The study adopts a control sample design to analyse if characteristics differ statistically from adopting ATCA firms and those which do not adopt ATCAs during the investigation period. Following this, a logit analysis establishes the importance of variables considered to have a role in distinguishing between ATCA adoptees and firms without ATCAs.
The variables tested include proportion of independent directors; directors' shareholdings; proportion of shares held by institutional shareholders; and proportion of shares held by the largest 20 shareholders.
Various measures of performance are also tested with some evidence being found that poorly performing firms are most likely to introduce ATCAs.
JEL Classification: G34
Suggested Citation: Suggested Citation