Takeover Intentions and Takeover Defences-A brief study

Priyatosh Sarkar

Abstract


Corporate takeovers play an important role in the economy. However, unlike standard market transaction, they could lead to hostility as the target company often resist the attempt of takeover by the acquirer. While the target company often adopt strategies to resist the attempt of takeover by the acquirer, the acquirer does everything possible to counter the prevention strategies of the target. The target adopts strategies that potentially increases cost of acquisition far above the prevailing market price of the firm and   sometimes deter efficient transfer of control.

It is often proclaimed that the intention of antitakeover tactics is to benefit the shareholder, but the regulators and practitioners believes that the antitakeover act benefit the inside at the cost of shareholder. The shareholders generally go by the opinion of the manager as they believe that managers are in a better position to evaluate the takeover offer.


Keywords


Acquirer: Economy: Shareholders: Strategies: Target:

Full Text:

PDF

References


Ali, R. and Gupta, G. S., (1999), “Motivation and Outcome of Malaysian Takeovers: An International Perspective,” Vikalpa, 24(3), pp. 41-49.

Asquith, P., (1983), “Merger bids, Uncertainty, and stockholder returns”, Journal of Financial Economics, Vol. 11(1, April): pp. 51-83.

Damodaran, A., (1999), Unpublished working paper, “Equity risk premium”, New York University, New York, NY, 1999 - stern.nyu.edu

Beitel P., Schiereck, D. and Wahrenburg, M., (2002), “Explaining the M & A- success in European bank merger and acquisitions”. Working paper, University of Written/Herdecke, Germany (January).

Berkovitch, E., and Narayanan, M., (1993)., “Motives for takeovers: An empirical investigation”, Journal of Financial and Quantitative Analysis 28(3): 347 – 362

Bruner (2004). Applied Mergers and Acquisitions, John Wiley & Sons, Inc., Hoboken, New Jersey pp. 45-50.

Chatterjee, R., and Meeks, G., (1996), “The Financial effects of takeover: Accounting rates of return and accounting regulation”, Journal of Business Finance & Accounting. 23(5/6, July):851-868.

Damodaran, A., (2001) Corporate Finance: Theory and Practice, Second Edition, published by John Wiley & Sons, Inc.

Damodaran, A., (2002) Investment Valuation, Tools and Techniques for determining the Value of Any Asset, John Wiley & Sons, Inc, 2 ed,.

Healy, P., Palepu, K., and Ruback, R., (1997), “Which takeovers are profitable: Strategic of financial?”Sloan Management Review 38(4, summer): pp.45-57.

Houstan J., James, C., and Ryngaert, M., (2001), “Where do merger gains come from? Bank mergers from the perspective of insiders and outsiders”,


Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.