Competing Bids, Target Management Resistance, and the Structure of Takeover Bids

Jennings, Robert H.; Mazzeo, M

doi:10.1093/rfs/6.4.883

Cited by 151 publications

(75 citation statements)

References 24 publications

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“…This may be because target resistance is less common and the likelihood of success lower in stock offers (Fishman, 1989;Jennings and Mazzeo, 1993). There is no evidence that target All in all, acquisitions during the sixth merger cycle fail to create superior value for their shareholders as well as synergy gains.…”

Section: Acquisition Abnormal Returnsmentioning

confidence: 99%

How have M&As changed? Evidence from the sixth merger wave

Alexandridis

Mavrovitis

Travlos

2012

The European Journal of Finance

113

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Section: Acquisition Abnormal Returnsmentioning

confidence: 99%

How have M&As changed? Evidence from the sixth merger wave

Alexandridis

Mavrovitis

Travlos

2012

The European Journal of Finance

113

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“…Anti-takeover defenses strengthen target management's ability to resist takeovers and to increase the bargaining power of target management (Ambrose and Megginson (1992)). Further, when the target CEO gives an initial negative recommendation about the merger to the target firm's board the bargaining power of the target is strengthened since the bidder would likely have to increase its bid to overcome the initial resistance (Jennings and Mazzeo (1993)). Target bargaining power varies inversely with the need of target shareholders to sell the firm.…”

Section: Relative Valuementioning

confidence: 99%

The effect of merger anticipation on bidder and target firm announcement period returns

Cornett

Tanyeri

Tehranian

2011

Journal of Corporate Finance

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This paper examines investors' anticipation of bidder and target merger candidacy and if investor anticipations about candidacy affect the distribution of value between bidder and target firm shareholders. We find that bidder firms can be predicted more accurately than target firms. To investigate how merger announcement period returns are distributed among bidder and target shareholders, we control for different degrees of predictability in bidder and target selection and find that the difference between bidder and target firm three-day cumulative abnormal returns around a merger announcement decreases significantly. Thus, the evidence supports the hypothesis that the asymmetry in investor anticipations about merger candidacy causes disparity in bidder and target firm announcement period abnormal returns.

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“…The fmdings of previous researchers (see Walking, 1985;Hirshleifer and Png, 1989;and Jennings and Mazzeo, 1993) suggest that if the initial buyout offer is high enough, competitive bidders are likely to be discouraged and management is less likely to need to adopt anti-takeover measures. Table 5, Panel F, shows there is no statistically significant difference in the initial buyout premium.…”

Section: Initial Buyout Offermentioning

confidence: 99%

“…On the other hand, management may take pre-emptive actions to deter a takeover threat and thereby reduce the number of competitive bidders. Furthermore, managers' decision to adopt an antitakeover measure may act as a signal that the buyout warrants a higher premium and thus may increase the amount of competitive bidding (see Jennings and Mazzeo, 1993). Table 5, Panel F, shows that the number of competing bids is higher when managers adopt an anti-takeover measure.…”

Section: Outside Bidsmentioning

confidence: 99%