Ownership, Board Characteristics and Non-Hostile Take-Overs in the UK: An Empirical and Predictive Analysis

45 Pages Posted: 10 Oct 2001

See all articles by Charlie Weir

Charlie Weir

Robert Gordon University - Aberdeen Business School

David Laing

Robert Gordon University - Centre for the Enhancement of Learning and Teaching (CELT)

Date Written: October 2001

Abstract

This paper analyses the corporate governance mechanisms of a sample of companies that have been acquired by friendly take-over and those of a matching control sample that have not. It also uses a holdout sample to assess the model's ability to correctly classify take-over candidates. The results show that the targets were poor performers and that there are significant governance differences between the friendly take-over targets and the control sample. The inclusion of governance characteristics enables the model to differentiate between target and non-target companies when predicting acquisition probability.

Keywords: Corporate governance; The market for corporate control; Cadbury Committee; Board independence; Friendly takeovers; Hostile takeovers; Model prediction; Ownership; Firm performance; Firm age; Director quality; UK, small quoted companies

JEL Classification: D21, G32, G34, L21

Suggested Citation

Weir, Charles and Laing, David, Ownership, Board Characteristics and Non-Hostile Take-Overs in the UK: An Empirical and Predictive Analysis (October 2001). Available at SSRN: https://ssrn.com/abstract=286432 or http://dx.doi.org/10.2139/ssrn.286432

Charles Weir

Robert Gordon University - Aberdeen Business School ( email )

Garthdee Road
RGU
Aberdeen AB10 7QE
United Kingdom
0044 1224 263800 (Phone)
0044 1224 263838 (Fax)

David Laing (Contact Author)

Robert Gordon University - Centre for the Enhancement of Learning and Teaching (CELT) ( email )

Schoolhill
Aberdeen, Scotland AB10 1F
United Kingdom
0044 1224 262246 (Phone)
0044 1224 263344 (Fax)

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