Poison or Placebo?  Evidence on the Deterrent and Wealth Effects of Modern Antitakeover Measures

Comment, Robert; Schwert, G. William

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Poison or Placebo? Evidence on the Deterrent and Wealth Effects of Modern Antitakeover Measures

NBER Working Paper No. w4316

33 Pages Posted: 25 Jun 2004 Last revised: 19 Oct 2022

See all articles by Robert Comment

G. William Schwert

University of Rochester - Simon Business School; National Bureau of Economic Research (NBER)

There are 2 versions of this paper

Date Written: April 1993

Abstract

This paper provides large-sample evidence that poison pill rights issues, control share statutes, and business combination statutes do not deter takeovers and are unlikely to have caused the demise of the 1980s market for corporate control, even though 87% of all exchange-listed firms are now covered by one or another of these antitakeover measures. We show that poison pills and control share statutes are reliably associated with higher takeover premiums for selling shareholders, both unconditionally and conditional on a successful takeover, and we provide updated event-study evidence for the three-quarters of all poison pills not yet analyzed.

Suggested Citation: Suggested Citation

Comment, Robert and Schwert, G. William, Poison or Placebo? Evidence on the Deterrent and Wealth Effects of Modern Antitakeover Measures (April 1993). NBER Working Paper No. w4316, Available at SSRN: https://ssrn.com/abstract=420296