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Contesting Corporate Control in the U.S.: The Role of Ownership Structure and the Anti-takeover Measure

Author

Listed:
  • Foley, Maggie
  • Cebula, Richard
  • Houmes, Robert

Abstract

This study investigates the role of ownership structure and anti-takeover measure in proxy contests using the nested logistic model. Findings indicate that dissidents target small firms with high agency costs, poor performance, and a high volume of prior shareholder proposals for Media Threats. Following a Media Threat, dissidents target firms with more independent boards, with the next step being a SEC filing of a proxy fight. After that, management in firms with "poison pills" and less independent boards are more likely to settle contests with dissidents, while firms with lower insider ownership are more likely to go through a proxy fight.

Suggested Citation

  • Foley, Maggie & Cebula, Richard & Houmes, Robert, 2014. "Contesting Corporate Control in the U.S.: The Role of Ownership Structure and the Anti-takeover Measure," MPRA Paper 55428, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:55428
    as

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    File URL: https://mpra.ub.uni-muenchen.de/55428/1/MPRA_paper_55428.pdf
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    References listed on IDEAS

    as
    1. Cebula, Richard, 1996. "An Empirical Analysis of the Impact of Government Tax and Auditing Policies on the Size of the Underground Economy: The Case of the United States, 1973-94," MPRA Paper 49810, University Library of Munich, Germany.
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    3. DeAngelo, Harry & DeAngelo, Linda, 1989. "Proxy contests and the governance of publicly held corporations," Journal of Financial Economics, Elsevier, vol. 23(1), pages 29-59, June.
    4. Renneboog, Luc & Szilagyi, Peter G., 2011. "The role of shareholder proposals in corporate governance," Journal of Corporate Finance, Elsevier, vol. 17(1), pages 167-188, February.
    5. Mulherin, J. Harold & Poulsen, Annette B., 1998. "Proxy contests and corporate change: implications for shareholder wealth," Journal of Financial Economics, Elsevier, vol. 47(3), pages 279-313, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    proxy fight; institutional shareholders; anti-takeover measures; nested logistic model;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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