Capital Structure and Ownership Distribution of Tender Offer Targets: An Empirical Study
Abstract
This study investigates the capital and ownership structure of firms receiving tender offers. Predictions of control-driven models developed by Haris and Raviv (1988) and Stulz (1988) and value-maximizing models developed by Israel (1991, 1992) are examined. The study reports results consistent with the predictions that: 1) target firms increase leverage during control contests, 2) leverage increases are higher when the tender offer is opposed, 3) leverage increases are higher when the tender offer is unsuccessful, and 4) ownership structure is important to explaining the success of tender offers. When tested jointly with other independent variables, only capital structure is statistically significant in explaining both management's opposition and the success of a tender offer.Download Info
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Bibliographic Info
Article provided by Financial Management Association in its journal Financial Management.
Volume (Year): 24 (1995)
Issue (Month): 1 (Spring)
Pages:
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Ning Gao & Jason Everett Brooks, 2010. "Capital structure and outcome of proxy contest targets: An empirical study," Managerial Finance, Emerald Group Publishing, vol. 36(4), pages 294-321, April.
- Henry, Darren, 2004. "Corporate governance and ownership structure of target companies and the outcome of takeovers," Pacific-Basin Finance Journal, Elsevier, vol. 12(4), pages 419-444, September.
- Omran, Mohammed, 2002. "Testing for a Significant Change in the Egyptian Economy under the Economic Reform Programme Era," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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