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Price and probability: decomposing the takeover effects of anti-takeover provisions

Cuñat, Vicente ORCID: 0000-0001-7504-2801, Giné, Mireia and Guadalupe, Maria (2020) Price and probability: decomposing the takeover effects of anti-takeover provisions. Journal of Finance, 75 (5). 2591 - 2629. ISSN 0022-1082

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Identification Number: 10.1111/jofi.12908


We study the effects of anti-takeover provisions (ATPs) on the takeover probability, the takeover premium, and target selection. Voting to remove an ATP increases both the takeover probability and the takeover premium, that is, there is no evidence of a trade-off between premiums and takeover probabilities. We provide causal estimates based on shareholder proposals to remove ATPs and address the endogenous selection of targets through bounding techniques. The positive premium effect in less protected firms is driven by better bidder-target matching and merger synergies.

Item Type: Article
Official URL:
Additional Information: © 2020 The Authors
Divisions: Finance
Subjects: H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
Date Deposited: 07 Oct 2019 13:03
Last Modified: 20 Oct 2021 00:59

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