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Corporate Takeover Barriers: Valuation And Firm Performance

Author

Listed:
  • Sharon Lee Bojanic
  • Dennis T. Officer

Abstract

This study provides additional evidence on the share price effect of takeover barriers such as antitakeover charter amendments, dual classes of common stock, and poison pill plans. The share price reaction to the construction of takeover barriers is found to be negative but insignificant. However, when disaggregated by type, significant negative share price reactions are found on construction of poison pill plans. New evidence on the possible relationship between firm performance and takeover barrier construction is also presented. The results of this study suggest that management of ‘efficiently‐run’ firms may construct takeover barriers to deter value‐diminishing takeovers.

Suggested Citation

  • Sharon Lee Bojanic & Dennis T. Officer, 1994. "Corporate Takeover Barriers: Valuation And Firm Performance," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 21(4), pages 589-601, June.
    • Handle: RePEc:bla:jbfnac:v:21:y:1994:i:4:p:589-601
    DOI: 10.1111/j.1468-5957.1994.tb00338.x
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    References listed on IDEAS

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