Decoupling the Motives for Takeover Resistance, and the Implications for Stockholders, Managers and Bidders

Carline, Nicholas F.; Linn, Scott C.; Yadav, Pradeep K.

doi:10.2139/ssrn.1572449

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2020

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“…Such a negotiation strategy increases the bargaining position of the target but does not necessarily block the takeover. These findings corroborate the “information leakage induced target resistance” argument of Carline and Yadav (2008). 4…”

Section: Introductionsupporting

confidence: 82%

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Signaling Under Threat: Evidence of Voluntary Disclosure in Contested Takeovers

Lobo

Xie

Yan

2020

Journal of Accounting, Auditing & Finance

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We investigate voluntary disclosure strategies in contested takeovers and the associated economic consequences. Using a difference-in-differences research design and propensity score matching, we find that, relative to friendly takeovers, target management in contested takeovers provides more earnings guidance and conveys more good news during the takeover. Moreover, voluntary disclosure helps contested targets negotiate a better offer, and the results are stronger for targets with more information asymmetry. Collectively, targets adopt voluntary disclosure and alter their strategies under the threat of contested takeover to enhance their bargaining power. Voluntary disclosure by contested targets serves as a negotiation tactic that potentially benefits target shareholders.

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Section: Introductionsupporting

confidence: 82%

“… 4. Carline and Yadav (2008) differentiate two types of target resistance. One is entrenchment-oriented resistance for the benefit of managers themselves, such us poison pills and classified boards.…”

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confidence: 99%