Successful antitakeover defenses,top management turnover and stock prices |
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Authors: | Rakesh Duggal Mike Cudd |
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Abstract: | Previous studies have not addressed the question of whether successful targets of hostile bids adopt specific defenses, or whether a relation exists between the type of defense and subsequent management turnover. This study finds that sale or buyback of stock is the most common-and probably the most successful-form of defense employed by targets to defeat hostile bidders, and that stock buyback leads to management retrenchment in the post-defeat period. The management turnover announcement has no impact on the target stock price and appears to convey no new information to the market. |
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