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CORPORATE TAKEOVER BARRIERS: VALUATION AND FIRM PERFORMANCE
Author(s) -
Bojanic Sharon Lee,
Officer Dennis T.
Publication year - 1994
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1994.tb00338.x
Subject(s) - stock price , share price , business , valuation (finance) , pill , charter , enterprise value , tender offer , monetary economics , stock (firearms) , economics , accounting , finance , stock exchange , shareholder , corporate governance , law , medicine , mechanical engineering , paleontology , engineering , series (stratigraphy) , pharmacology , biology , political science
This study provides additional evidence on the share price effect of takeover barriers such as antitakeover charter amendments, dual classes of common stock, and poison pill plans. The share price reaction to the construction of takeover barriers is found to be negative but insignificant. However, when disaggregated by type, significant negative share price reactions are found on construction of poison pill plans. New evidence on the possible relationship between firm performance and takeover barrier construction is also presented. The results of this study suggest that management of ‘efficiently‐run’ firms may construct takeover barriers to deter value‐diminishing takeovers.