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Management Resistance to Takeover Bids and Shareholder Response
Author(s) -
Sinha Sidharth
Publication year - 1992
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1992.tb01323.x
Subject(s) - shareholder , information asymmetry , consumption (sociology) , economics , tender offer , resistance (ecology) , business , empirical research , accounting , monetary economics , microeconomics , finance , mathematics , corporate governance , sociology , ecology , social science , statistics , biology
This paper presents a model of management resistance to takeover bids in which there is both a managershareholder conflict of interest due to perquisite consumption and information asymmetry. The optimal response of shareholders to such resistance is then analysed. The paper highlights the role of information asymmetry and perquisite consumption in explaining the empirical evidence on takeovers and the institutional features of golden parachutes and greenmail.