Australian evidence on the determinants and impact of takeover resistance


  • We are grateful to the seminar participants at the University of Newcastle, the University of Melbourne and conference participants at the 2003 MidWest Finance Association Annual Conference and the 2003 AFAANZ Annual Conference. We are also grateful for the very helpful comments given by Kevin Davis, Robert Durand, Steve Easton and John Handley.


In the present paper, we examine the determinants and impact of target bid resistance on the wealth of target shareholders and the takeover process in Australia. We find that bid resistance increases target shareholder wealth in the post-announcement period and that the probability of bid hostility increases with the target's size, decreases with the target's performance and is unrelated to the size of the premium offered by the bidder. We also find that bid hostility decreases the probability of bid success, increases the probability of bid revision and has no effect on the probability of competing bidders entering the market.