Journal article
On the Use of Poison Pills and Defensive Payouts by Takeover Targets
The Journal of business (Chicago, Ill.), Vol.79(4), pp.1783-1807
07/01/2006
DOI: 10.1086/503648
Abstract
Using a large sample of unsolicited takeover attempts, we examine the determinants and effects of targets’ choice to adopt poison pills either before or after unsolicited offers and to initiate defensive payouts. The probability of poison pill adoptions decreases with insider ownership, whereas the probability of defensive repurchases increases at a decreasing rate with insider ownership. Poison pills contribute to bid increases and higher bids, yet do not alter the likelihood of takeover. Defensive share repurchases slightly reduce the takeover likelihood but do not appear to harm shareholders, perhaps because they tend to fend off lowball bids or increase the firm’s leverage.
Details
- Title: Subtitle
- On the Use of Poison Pills and Defensive Payouts by Takeover Targets
- Creators
- Randall A. HeronErik Lie
- Resource Type
- Journal article
- Publication Details
- The Journal of business (Chicago, Ill.), Vol.79(4), pp.1783-1807
- Publisher
- The University of Chicago Press
- DOI
- 10.1086/503648
- ISSN
- 0021-9398
- eISSN
- 1537-5374
- Language
- English
- Date published
- 07/01/2006
- Academic Unit
- Finance
- Record Identifier
- 9984380550702771
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