Merger proposals, managerial discretion, and magnitude of shareholders' wealth gains

Recently, the market for corporate control has attracted much attention. Scholars have attempted to ascertain whether managerial resistance is in the interests of shareholders. This study compares the average actual changes in wealth of accepted merger proposals with those of rejected merger proposa...

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Bibliographic Details
Published inJournal of economics and business Vol. 39; no. 3; pp. 251 - 266
Main Author Yen, Gili
Format Journal Article
LanguageEnglish
Published Philadelphia, Pa Elsevier Inc 01.08.1987
Elsevier
Temple University
Elsevier Science Ltd
SeriesJournal of Economics and Business
Subjects
Acquisitions & mergers
Analysis
Economic models
Effects
Empirical
Impacts
Managers
Resistance
Shareholders equity
Stockholders
Tender offers
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Summary:Recently, the market for corporate control has attracted much attention. Scholars have attempted to ascertain whether managerial resistance is in the interests of shareholders. This study compares the average actual changes in wealth of accepted merger proposals with those of rejected merger proposals. It also compares the realized changes in shareholder wealth of the rejected proposals with the realizable shareholder wealth changes. In either case, managerial resistance leads to smaller gains in wealth. Based on these results, we cannot reject the view that managerial resistance is detrimental to the interests of shareholders.
ISSN:0148-6195
1879-1735
DOI:10.1016/0148-6195(87)90021-X