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Boyson, Nicole M., Gantchev, Nickolay and Shivdasani, Anil (2017) Activism mergers. Journal of Financial Economics, 126 (1). pp. 54-73. doi:10.1016/j.jfineco.2017.06.008 ISSN 0304-405X.
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Official URL: http://dx.doi.org/10.1016/j.jfineco.2017.06.008
Abstract
Shareholder value creation from hedge fund activism occurs primarily by influencing takeover outcomes for targeted firms. Controlling for selection decisions, activist interventions substantially increase the probability of a takeover offer. Third-party bids for targets have higher returns, premia, and completion rates, but these patterns reverse when the activist is the bidder. Failed bids for activism targets lead to improvements in operating performance, financial policy, and positive long-term abnormal returns, suggesting that activism enhances value. The positive long-term performance from hedge fund activism arises from monitoring target management during merger and acquisition contests and not from target undervaluation or bidder overpayment.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HG Finance | ||||||||
Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Hedge funds, Corporate governance, Stockholders, Consolidation and merger of corporations | ||||||||
Journal or Publication Title: | Journal of Financial Economics | ||||||||
Publisher: | Elsevier Science BV | ||||||||
ISSN: | 0304-405X | ||||||||
Official Date: | October 2017 | ||||||||
Dates: |
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Volume: | 126 | ||||||||
Number: | 1 | ||||||||
Page Range: | pp. 54-73 | ||||||||
DOI: | 10.1016/j.jfineco.2017.06.008 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 12 November 2020 | ||||||||
Date of first compliant Open Access: | 12 November 2020 |
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