How Target Shareholders Benefit from Value‐Reducing Defensive Strategies in Takeovers

How Target Shareholders Benefit from Value‐Reducing Defensive Strategies in Takeovers

  • ELAZAR BERKOVITCH
  • NAVEEN KHANNA

Article first published online: 30th April 2012 DOI: 10.1111/j.1540-6261.1990.tb05084.x

Abstract


This paper shows that target shareholders can be made better off through the use of certain types of defensive strategies that reduce the value of the target by different amounts for different bidders. In many cases, simply the threat of such strategies can make target shareholders better off. Therefore, empirical tests based on stock price reactions at the adoption of defensive strategies may be underestimating the effect of such strategies. The paper also identifies the necessary characteristics that make these strategies effective and shows that many observed defenses possess similar properties.

Sign in to access the full article.

Related articles


Back Matter

Article first published online: 18th May 2016 / DOI: 10.1111/j.1540-6261.1990.tb00378.x

Read Article

Front Matter

Article first published online: 18th May 2016 / DOI: 10.1111/j.1540-6261.1990.tb00379.x

Read Article

SMITH BREEDEN PRIZES FOR 1989

Article first published online: 30th April 2012 / DOI: 10.1111/j.1540-6261.1990.tb05077.x

Read Article

The Weekend Effect: Trading Patterns of Individual and Institutional Investors

  • JOSEF LAKONISHOK
  • EDWIN MABERLY

Article first published online: 30th April 2012 / DOI: 10.1111/j.1540-6261.1990.tb05089.x

Read Article

Margin Regulation and Stock Market Volatility

  • DAVID A. HSIEH
  • MERTON H. MILLER

Article first published online: 30th April 2012 / DOI: 10.1111/j.1540-6261.1990.tb05078.x

Read Article

Can Futures Market Data Be Used to Understand the Behavior of Real Interest Rates?

  • FREDERIC S. MISHKIN

Article first published online: 30th April 2012 / DOI: 10.1111/j.1540-6261.1990.tb05090.x

Read Article

Are you an Author?


Please read our submission requirements and find out how to submit your paper to the Journal of Finance

Submit a paper