Wealth creation and bid resistance in UK takeover bids
Article Abstract:
A study is conducted to examine the determinants of wealth creation and bid resistance in successful takeover bids. The relationship between the two variables is also explored. Data for the study are drawn from a sample of 178 successful takeover bids in the UK. The findings indicate that wealth creation is directly and considerably affected by bid resistance, and that wealth has a considerable possible impact on bid resistance in the mood equation. Furthermore, the results suggest that the existence of managerial and financial synergies and the absence of operational synergies. Finally, the corporate governance mechanisms examined is found to involve considerable monitoring. The relevance of these findings to current debate on such issues as corporate governance, the agency problem and diversification is discussed,
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1997
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Modelling takeover likelihood
Article Abstract:
A study was conducted regarding the likelihood of takeovers and the purpose behind these acquisitions of firms. Using the multinomial logit and binomial logit models, the study showed that the latter model manifested illusive and erroneous results in determining the characteristics of the firms subject for takeovers. However, the multinomial logit provided clearer results in determining the characteristics of firms subject to takeover. This model revealed that hostile and friendly targets are distinct from one another and such differences were dependent upon the time periods.
Publication Name: Journal of Business Finance and Accounting
Subject: Business
ISSN: 0306-686X
Year: 1997
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Agency, bid resistance and the market for corporate control
Article Abstract:
Firm managers use different strategies to decrease possibility of successful bidding. This was concluded in a study of the anti-takeover measures used by UK firms from 1978-1989 to determine the various post-bid defense activities used by target firms. In addition, target firms' shareholders allegedly connived with the firms' managers in bid resistance for their benefits and interests. These findings conformed with the developments in agency theory which were also discussed.
Publication Name: Journal of Business Finance and Accounting
Subject: Business
ISSN: 0306-686X
Year: 1997
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