The authors are respectively, Visiting Assistant Professor of Finance, University of Massachusetts at Amherst; and Associate Professor, Department of Finance, University of Kentucky.
CORPORATE TAKEOVER BARRIERS: VALUATION AND FIRM PERFORMANCE
Article first published online: 7 DEC 2006
Journal of Business Finance & Accounting
Volume 21, Issue 4, pages 589–601, June 1994
How to Cite
Bojanic, S. L. and Officer, D. T. (1994), CORPORATE TAKEOVER BARRIERS: VALUATION AND FIRM PERFORMANCE. Journal of Business Finance & Accounting, 21: 589–601. doi: 10.1111/j.1468-5957.1994.tb00338.x
- Issue published online: 7 DEC 2006
- Article first published online: 7 DEC 2006
- (Paper received January 1992, accepted May 1992)
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.