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Defending Against Hostile Takeovers: Impact on Shareholder Wealth

Lisa Borstadt (Assistant Professor of Finance, University of Colorado at Colorado Springs)
Thomas Zwirlein (Assistant Professor of Finance, University of Colorado at Colorado Springs)
James Brickley (Professor of Finance, University of Utah)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 January 1991

Abstract

Innovations in takeover financing, less restrictive regulatory requirements, and a general desire to enhance market position have led to a substantial increase in corporate takeover and restructuring activity. In response target firm managers have become increasingly active in devising defensive strategies and tactics designed to ward off hostile bidders. It is well‐ documented, however, that large wealth gains accrue to target firm shareholders in mergers and acquisitions. Thus the emergence of such terms as “shark repellents”, “poison pills”, and “greenmail”, raises the question of whose best interests are really being served by antitakeover measures.

Citation

Borstadt, L., Zwirlein, T. and Brickley, J. (1991), "Defending Against Hostile Takeovers: Impact on Shareholder Wealth", Managerial Finance, Vol. 17 No. 1, pp. 25-33. https://doi.org/10.1108/eb013664

Publisher

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MCB UP Ltd

Copyright © 1991, MCB UP Limited