Corporate Governance and Anti‐Takeover Devices: evidence from Australia

This paper seeks to establish what form of management structure, ownership structure and financial characteristics are exhibited by firms that propose and subsequently adopt anti‐takeover charter amendments (ATCAs) in Australia over the period June 1986 to December 1990. An ATCA is a restriction of partial takeover activity implemented though shareholder approval to changes in a firm’s constitution. Approval for such changes is obtained through majority agreement from a plebiscite of shareholders. The study adopts a control sample design to analyse if characteristics differ statistically from adopting ATCA firms and those which do not adopt ATCAs during the investigation period. Following this, a logit analysis establishes the importance of variables considered to have a role in distinguishing between ATCA adoptees and firms without ATCAs. This research is motivated by the fact that little is known about the reasons for alternative corporate governance structures in Australia and is a natural extension to Armstrong, Lange and Woo (1994) which determined that firms adopting ATCAs were likely to experience increases in firm value around the announcement date of the ATCA.