The Board of Directors and the Adoption of Poison Pills

Posted: 22 May 1995

See all articles by James A. Brickley

James A. Brickley

University of Rochester - Simon Business School

Jeffrey L. Coles

University of Utah - Department of Finance

Rory L. Terry

Fort Hays State University

Abstract

In this paper we analyze how the stock-market reaction to the adoption of poison pills and the subsequent outcome of takeover attempts vary with the composition of the firm's shares among competing bidders and by other firms to entrench managers at the shareholders' expense. Our results also suggest that outside directors can be important in helping to align the interests of the board with the interests of shareholders.

JEL Classification: G10

Suggested Citation

Brickley, James A. and Coles, Jeffrey L. and Terry, Rory L., The Board of Directors and the Adoption of Poison Pills. Available at SSRN: https://ssrn.com/abstract=6270

James A. Brickley (Contact Author)

University of Rochester - Simon Business School ( email )

Carol Simon Hall 3-160L
Rochester, NY 14627
United States
585-275-3433 (Phone)
585-442-6323 (Fax)

Jeffrey L. Coles

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States
801-587-9093 (Phone)

Rory L. Terry

Fort Hays State University ( email )

Hays, KS 67601
United States

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