2009-02-01
Ownership structure and target returns
Publication
Publication
Journal of Corporate Finance , Volume 15 - Issue 1 p. 48- 65
Contrary to past literature, ownership defined as “all officers and directors” of the target firm has no association with target returns. Rather, we find that inside (managerial) ownership has a positive relation with target returns, whereas active-outside (non-managing director) ownership has a negative relation with target returns. Using accounting-based versus market-based performance measures, we find that the relation between inside ownership and target returns is best explained by takeover anticipation. Using bidder and synergy returns we find that the relation between outside ownership and target returns is best explained by outsiders' willingness to share gains with the bidder. While the relations are more pronounced for non-tender deals, they also hold for tender offers when active-outside ownership is corporate rather than institutional.
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doi.org/10.1016/j.jcorpfin.2008.09.002, hdl.handle.net/1765/19391 | |
ERIM Top-Core Articles | |
Journal of Corporate Finance | |
Organisation | Erasmus Research Institute of Management |
Bauguess, S., Moeller, S., Schlingemann, F., & Zutter, C. (2009). Ownership structure and target returns. Journal of Corporate Finance, 15(1), 48–65. doi:10.1016/j.jcorpfin.2008.09.002 |