An Empirical analysis of cancelled mergers, board composition and ownership structure
This paper examines the effects of board composition and ownership structure in the valuation of target firms in cancelled mergers. These results find no significant association between board composition and shareholder wealth. On the contrary, when a merger is cancelled by the target firm, abnormal returns surrounding the announcement are negatively related to share ownership by inside directors. In addition, we find the likelihood that the target firm is subsequently taken over depends largely on two factors: stock ownership by inside directors and the presence of multiple bids. These results suggest a strong association between ownership structure and the valuation of target firms in cancelled mergers.
Year of publication: |
2002
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Authors: | Davidson, Wallace ; Rosenstein, Stuart ; Sundaram, Sridhar |
Published in: |
Applied Financial Economics. - Taylor & Francis Journals, ISSN 0960-3107. - Vol. 12.2002, 7, p. 485-491
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Publisher: |
Taylor & Francis Journals |
Saved in:
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