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The Role of Hostile Stakes in German Corporate Governance

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Author Info

  • Tim Jenkinson
  • Alexander Ljungqvist

Abstract

This paper uses clinical evidence to show how the German system of corporate control and governance is both more active and more hostile than has previously been suggested. It provides a complete breakdown of ownership and takeover defence patterns in German listed companies and finds highly fragmented (but not dispersed) ownership in non-majority controlled firms. We document how the accumulation of hostile stakes can be used to gain control of target companies given these ownership patterns. The paper also suggests an important role for banks in helping predators accumulate, and avoid the disclosure of, large stakes.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 1999-FE-02.

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Date of creation: 01 Aug 1999
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Handle: RePEc:oxf:wpaper:1999-fe-02

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Keywords: corporate governance; block trades; takeovers; banks; Germany;

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References

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  12. Patrick BOLTON & Ernst-Ludwig VON THADDEN, 1996. "Blocks, Liquidity, and Corporate Control," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9619, Université de Lausanne, Faculté des HEC, DEEP.
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  16. Spencer, Carolyn & Akhigbe, Aigbe & Madura, Jeff, 1998. "Impact of partial control on policies enacted by partial targets," Journal of Banking & Finance, Elsevier, vol. 22(4), pages 425-445, May.
  17. Rajan, Raghuram G & Zingales, Luigi, 1995. " What Do We Know about Capital Structure? Some Evidence from International Data," Journal of Finance, American Finance Association, vol. 50(5), pages 1421-60, December.
  18. Grundfest, Joseph A., 1990. "Subordination of American capital," Journal of Financial Economics, Elsevier, vol. 27(1), pages 89-114, September.
  19. Jennifer E. Bethel & Julia Porter Liebeskind & Tim Opler, 1998. "Block Share Purchases and Corporate Performance," Journal of Finance, American Finance Association, vol. 53(2), pages 605-634, 04.
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