Vote Avoidance and Shareholder Voting in Mergers and Acquisitions

We examine whether, how, and why acquirer shareholder voting matters. We show that acquirers with low institutional ownership, high deal risk, and high agency costs are more likely to bypass shareholder voting. Such acquirers have lower announcement returns and make higher offers than those who do not. To avoid a shareholder vote, acquirers increase equity issuance and cut payout to raise the portion of cash in mixed-payment deals. Employing a regression discontinuity design, we show a positive causal effect of shareholder voting concentrated among acquirers with higher institutional ownership. We conclude that shareholder voting mitigates agency problems in corporate acquisitions