Competition for Board Seats Following Stock-for-Stock Mergers

Posted: 29 Jul 2003

See all articles by Wallace N. Davidson

Wallace N. Davidson

Southern Illinois University - Department of Finance

Sameh Sakr

Arab Academy for Science and Technology

Yixi Ning

University of Houston - Victoria - School of Business Administration

Abstract

We examine the board structure of firms following stock-for-stock mergers. We find that former target inside (outside) directors are more likely to join the combined firm board when target insiders (outsiders) have a relatively strong position on the pre-merger target board. The relative size of the target firm, target firm profitability, and target blockholder ownership also influence whether target directors join the combined board. We conclude that competition for board seats on the combined board is won by the target directors with greater bargaining positions.

JEL Classification: G34

Suggested Citation

Davidson, Wallace N. and Sakr, Sameh and Ning, Yixi, Competition for Board Seats Following Stock-for-Stock Mergers. Available at SSRN: https://ssrn.com/abstract=397120

Wallace N. Davidson (Contact Author)

Southern Illinois University - Department of Finance ( email )

Mail Code 4626
Carbondale, IL 62901-4626
United States
618-453-1429 (Phone)
618-453-5626 (Fax)

Sameh Sakr

Arab Academy for Science and Technology ( email )

P.O. Box 1029
Miami, Alexandria, 1029
Egypt

Yixi Ning

University of Houston - Victoria - School of Business Administration ( email )

2002 W Grand Pkwy
Katy, TX 77449
United States

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