Non-executive directorship importance and takeover hostility: Australian evidence |
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Authors: | Chistopher Day Martin Bugeja Helen Spiropoulos Zoltan Matolcsy |
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Institution: | University of Technology Sydney, Sydney, New South Wales, Australia |
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Abstract: | This study investigates the importance of the target firm directorship to target firm non-executive directors during takeovers. Using Australian data and a size-based measure of directorship importance, we find a positive association between takeover hostility and directorship importance after controlling for takeover premiums and target firm size. Further analysis reveals that directorship importance leads to a greater likelihood of offer price revisions following initial rejection of a takeover bid, but not the likelihood of bid success. Our findings are consistent with target firm non-executive directors exhibiting self-serving behaviour at directorships which they consider more important to their reputation. |
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Keywords: | director incentives directorship importance mergers and acquisitions takeover |
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