Monitoring and the acquiring firm reaction to bad takeover bids

Bugeja, M

Monitoring and the acquiring firm reaction to bad takeover bids

Bugeja, M

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Publisher:: Virtus Interpress
Publication Type:: Journal Article
Citation:: Corporate Ownership & Control, 2009, 7 (2), pp. 208 - 223
Issue Date:: 2009-01

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Field	Value	Language
dc.contributor.author	Bugeja, M https://orcid.org/0000-0002-1941-5092	en_US
dc.date.issued	2009-01	en_US
dc.identifier.citation	Corporate Ownership & Control, 2009, 7 (2), pp. 208 - 223	en_US
dc.identifier.issn	1727-9232	en_US
dc.identifier.uri	http://hdl.handle.net/10453/10255
dc.description.abstract	This study investigates variables that explain why bidding firms raise their offer price following a negative capital market reaction to a takeover announcement. We find that whilst an increasing number of blockholders restrains the pursuit of unprofitable takeovers, greater institutional ownership and takeover hostility increases the likelihood a bidder will raise their offer price. Multiple bidders and board independence are unrelated to an increase in takeover price. Inconsistent with agency theory, management ownership and free cash flow do not explain bidder actions.	en_US
dc.publisher	Virtus Interpress	en_US
dc.relation.ispartof	Corporate Ownership & Control	en_US
dc.title	Monitoring and the acquiring firm reaction to bad takeover bids	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	7	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1503 Business and Management	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access
pubs.consider-herdc	true	en_US
pubs.issue	2	en_US
pubs.volume	7	en_US

Abstract:

This study investigates variables that explain why bidding firms raise their offer price following a negative capital market reaction to a takeover announcement. We find that whilst an increasing number of blockholders restrains the pursuit of unprofitable takeovers, greater institutional ownership and takeover hostility increases the likelihood a bidder will raise their offer price. Multiple bidders and board independence are unrelated to an increase in takeover price. Inconsistent with agency theory, management ownership and free cash flow do not explain bidder actions.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/10255