Can antitakeover activity really create wealth? Evidence from Australia

Abstract

This paper examines management-induced antitakeover activity which occurred in

Corporate Governance and Anti‐Takeover Devices: evidence from Australia

“…It may be that the elimination of some relevant nominee shareholders when measuring the extent of institutional holdings may have produced this unexpected result. 30 However, the insignificance of institutional holdings is consistent with the findings of Armstrong, Lange and Woo (1994), with respect to ATCA proposals. 31…”

“…19. This was examined by Armstrong, Lange and Woo (1994), who found that the majority of anti-takeover amendments occurred subsequent to the amendment of the Companies (Acquisition of Shares) Act in June 1986. North Broken Hill Holdings was the only company to propose partial takeover restrictions prior to 24 June 1986, and was able to do this as the uncertainty surrounding the revisions to the corporations legislation had been largely resolved by this time.…”

“…The sample of ATCA firms used was the same as that employed by Armstrong, Lange and Woo (1994). There were 37 firms in the largest 150 companies 17 each year which implemented anti-takeover devices from the earliest possible date, June 1986, through to the end of 1990.…”

“…The matched sample used was that constructed by Armstrong, Lange and Woo (1994). The matching was made on the basis of market capitalisation.…”

“…Earnings Data relating to all of the board of director variables (DIRNUM, PROPDEP, DIRHLDGS) and the remaining ownership variables (INSTHLDGS, TOP20%) were collected manually from the most recent company annual reports 24 prior to the ATCA proposal. 25 Institutional owners were identified using the approach used by Crough (1980), Lange and Sharpe (1995) and Armstrong, Lange and Woo (1994), whereby institutional investors are categorised as life and general insurance offices, superannuation funds, trustee investment companies, and state treasury corporations and financing authorities.…”