The Agency Problem in the Merger of Vistula &amp; Wólczanka Ltd. and W. Kruk Ltd.

Socha, Błażej

doi:10.2478/v10103-009-0017-4

Cited by 1 publication

(1 citation statement)

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“…The only other protective mechanism in existence was a company statute that gave Wojciech Kruk and his family the power to appoint two members of the supervisory board as long as they had at least 25 per cent of the share capital (Socha, 2009). The statute also granted Wojciech Kruk the power to appoint the head of the supervisory board for as long as his share stake did not fall below 10 per cent.…”

Section: The Case For the Defencementioning

confidence: 99%

Contested takeovers of family firms and socioemotional wealth: a case study

Campbell

Jerzemowska

2017

BJM

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Purpose -This paper provides an understanding of the importance of socioemotional wealth to family firms in Poland viewed through the lens of the events surrounding the first hostile takeover bid of the post-communist era on the Warsaw Stock Exchange when the clothing company Vistula & Wólczanka (V&W) made an unsolicited, leveraged bid for the family-controlled jewellery company W. Kruk.Design/methodology/approach -The 2008 takeover and its aftermath are described in the context of the corporate governance and legal environment in Poland. The case study events demonstrate the connection between firm behavior and socioemotional wealth theory.Findings -After the acquisition of W. Kruk by V&W, the Kruk family purchased stock in the newly named Vistula Group and gained influence over the supervisory board in concert with a business ally, eventually wresting back control of the company in the style of a Pac-Man 'defence'. The case study illustrates the importance of socioemotional wealth in family firm takeovers.Research limitations/implications -The case-study design has limitations for generalizability. Nevertheless the research highlights the relevance of socioemotional wealth preservation in understanding the market for control of listed family firms in Poland.Practical implications -Understanding the reaction by family firms to takeover bids requires recognition that there is a tradeoff between financial and socioemotional wealth considerations, not just financial gains and losses.Originality/value -The case study demonstrates the importance of socioemotional wealth to family firms and suggests that the balance of power in takeovers on the Polish stock market rests with incumbent management.

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Section: The Case For the Defencementioning

confidence: 99%