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The impact of anti-takeover charter amendments on expectations of future earnings and takeover activity

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  • Mark S. Johnson

    (Michigan State University, East Lansing, MI, USA)

  • Ramesh P. Rao

    (Texas Tech University, Lubbock, TX, USA)

Abstract

In this study, additional evidence of the impact of anti-takeover amendments on firm earnings and subsequent takeover activity is presented. It is found that analysts' projections of financial performance measures do not appear to be altered by the adoption of anti-takeover amendments. Additionally, it is found that the anti-takeover charter amendments do not impact either takeover activity or takeover premiums following their adoption. Thus, anti-takeover amendments appear to have few, if any, consequences to shareholders. Copyright © 1999 John Wiley & Sons, Ltd.

Suggested Citation

  • Mark S. Johnson & Ramesh P. Rao, 1999. "The impact of anti-takeover charter amendments on expectations of future earnings and takeover activity," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 75-86.
    • Handle: RePEc:wly:mgtdec:v:20:y:1999:i:2:p:75-86
    DOI: 10.1002/(SICI)1099-1468(199903)20:2<75::AID-MDE917>3.0.CO;2-Q
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    References listed on IDEAS

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    3. Ellie G. Harris, 1990. "Antitakeover Measures, Golden Parachutes, and Target Firm Shareholder Welfare," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 614-625, Winter.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    6. Pound, John, 1987. "The Effects of Antitakeover Amendments on Takeover Activity: Some Direct Evidence," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 353-367, October.
    7. Linn, Scott C. & McConnell, John J., 1983. "An empirical investigation of the impact of `antitakeover' amendments on common stock prices," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 361-399, April.
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