IDEAS home Printed from https://ideas.repec.org/a/bla/eufman/v9y2003i4p485-511.html
   My bibliography  Save this article

Takeover Defences and IPO Firm Value in the Netherlands

Author

Listed:
  • Peter Roosenboom
  • Tjalling van der Goot

Abstract

The central question of this study involves the relation between the use of takeover defences and IPO firm value. We report that management frequently uses takeover defences before taking the firm public. The use of takeover defences is primarily motivated by managerial entrenchment. IPO investors anticipate potential conflict of interests with management and reduce the price they pay for the IPO shares if takeover defences are adopted. Although managers internalise this cost of takeover defences to the degree they own pre-IPO stock, they are likely to gain through private control benefits. Non-management pre-IPO owners lose. Their shares are worth less, but different from managers, they do not get offsetting private control benefits. We infer that managers use takeover defences to protect private control benefits at non-management pre-IPO owners' expense. Copyright Blackwell Publishing Ltd, 2003.

Suggested Citation

  • Peter Roosenboom & Tjalling van der Goot, 2003. "Takeover Defences and IPO Firm Value in the Netherlands," European Financial Management, European Financial Management Association, vol. 9(4), pages 485-511.
  • Handle: RePEc:bla:eufman:v:9:y:2003:i:4:p:485-511
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/1468-036X.00233
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marc Deloof & Wouter De Maeseneire & Koen Inghelbrecht, 2009. "How Do Investment Banks Value Initial Public Offerings (IPOs)?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(1-2), pages 130-160.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:eufman:v:9:y:2003:i:4:p:485-511. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/efmaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.