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Defensive Strategies of Target Firms in UK Contested Takeovers

Dr P.S. Sudarsanam (City University Business School, Frobisher Crescent, Barbican Centre, London EC2)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 June 1991



Takeovers play an important role in the allocation of re‐sources to the most efficient uses and represent a mech‐anism by which corporate resources are transferred from one management team to another (Jensen and Ruback, 1983). A result of this managerial displacement is expected to be an increase in shareholder wealth. This argument pre‐supposes that managers attempting takeovers are motivated to create value for shareholders. This picture of managerial disinterestedness in the service of share‐holders ignores potential agency conflicts between man‐agers and shareholders. When faced with a takeover bid, which if successful may lead to its own displacement, the management team at the target may devise ways of frus‐trating the bid.


Sudarsanam, P.S. (1991), "Defensive Strategies of Target Firms in UK Contested Takeovers", Managerial Finance, Vol. 17 No. 6, pp. 47-56.




Copyright © 1991, MCB UP Limited

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