Antitakeover provisions in corporate spin-offs
We analyze the relation between antitakeover provisions (ATPs) and the performance of spin-off firms. We find that firms protected by more ATPs before spin-offs have higher abnormal announcement returns and greater improvements in post-spin-off operating performance than firms with fewer ATPs. Further, firms that reduce the number of ATPs after spin-offs have greater improvements in operating performance than firms that do not reduce the number of ATPs. Finally, CEOs of pre-spin-off firms tend to retain more ATPs in parent firms and assign fewer ATPs to the spun-off units if they remain as the CEOs of the parents but not the spun-off units. Overall, our results indicate a positive relation between ATPs and the value gains to spin-offs.
Year of publication: |
2010
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Authors: | Chemmanur, Thomas J. ; Jordan, Bradford D. ; Liu, Mark H. ; Wu, Qun |
Published in: |
Journal of Banking & Finance. - Elsevier, ISSN 0378-4266. - Vol. 34.2010, 4, p. 813-824
|
Publisher: |
Elsevier |
Keywords: | Spin-offs Antitakeover provisions Managerial entrenchment Shareholders' interest |
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