We examine the interactive nature of antitakeover provisions (ATPs) with firm characteristics and governance environments in explaining the cross-section of bidder announcement returns. Using a sample of 3,340 completed acquisitions in the period of 1996-2006, we document that ATPs hurt acquisition performance only when acquirers hold a high level of excess cash. Similarly, ATPs are associated with lower bidder returns only when product market competition is weak and/or public pension fund ownership is low. By contrast, when product market competition is intense and/or public pension fund ownership is high, ATPs have no impact on bidder returns. The presence of the complementarity among ATPs, excess cash, industry competition, and public pension fund ownership suggests that ATPs per se do not necessarily result in value-destroying acquisitions for all firms. We address the endogeneity issue of unknown variables by using a proxy for firm prestige and find consistent evidence.
Keywords Cash holdings; Corporate governance; Antitakeover provisions; Mergers and acquisitions
JEL classification: G30; G32; G34
학회소식
[2013년 제 4차] Cash Holdings, Corporate Governance and Acquirer Re
작성자 : 관리자
조회수 : 879
게시일 :
2013-12-16
