Erschienen:
Cambridge University Press (CUP), 2024
Erschienen in:
Journal of Financial and Quantitative Analysis, 59 (2024) 2, Seite 759-795
Sprache:
Englisch
DOI:
10.1017/s0022109023000170
ISSN:
0022-1090;
1756-6916
Entstehung:
Anmerkungen:
Beschreibung:
AbstractWe exploit the arrival of industry-wide synergistic merger waves to identify whether classified boards deter takeover bids. In a stylized model, we show that when target classified boards are costly to bidders, their negative effect on takeover likelihood should be more pronounced during merger waves. Using a sample of takeover bids in the United States between 1990 and 2016, we find strong evidence supporting this prediction. The results are robust to accounting for the benefits of classified boards and controlling for other antitakeover provisions. Our findings suggest that classified boards effectively reduce a firm’s exposure to the takeover market.