This paper tests a theory conjecturing that cross-listing can insulate firms from potential hostile takeovers owing to the increased cost concern of bidders. We find a significant and positive ...relation between the corporate control threat and the likelihood that firms cross-list in a foreign country. Firms facing takeover threats are more likely to choose hosting countries with greater accounting differences from the US GAAP. Subsample evidence suggests that cross-listing is more likely to be used as an antitakeover device if firms have foreign market exposure or when all-cash offers are less likely. Tests based on quasi-natural experiments provide further support.
Regulatory power supplementing legislation to exempt persons from and modify operation of takeover provisions - post-1991 regulator given power to apply to Corporations and Securities Panel for ...orders in particular circumstances - role expanded in 2000 allowing any party to apply to panel - analysis of forces driving each of these developments with focus on resulting principles underlying legislation.
Over the last fifteen years, numerous finance articles have examined the effect of antitakeover statutes (ATSs) on firm and managerial behavior. In this Article, we evaluate these studies from a ...theoretical-legal and an empirical-finance perspective. To assess the impact of an antitakeover statute from a theoretical perspective, one has to evaluate how the statute affects the ability of a firm to defend itself in light of the other defenses already available to the firm. The finance studies, by failing to take account of how antitakeover defenses interact and how they function in practice, are based on fundamentally flawed assumptions about the additional protection afforded by antitakeover statutes. In particular, because most firms have access to other, more powerful takeover defenses—specifically, poison pills—standard antitakeover statutes do not materially increase a company's ability to resist a hostile takeover bid. From the empirical side, the finance studies omit important control variables, use improper specifications, contain errors in coding the year in which states adopted statutes and the companies such statutes cover, and suffer from selection bias and endogeneity. These problems render the empirical results derived by these studies unreliable. Indeed, this Article replicates several of these empirical studies in order to show that their results do not withstand closer scrutiny. This Article has important implications for the debate over whether an increased threat of takeovers acts as a disciplining device or induces short-termism. The finance studies criticized herein have been taken as supplying the single best source of unconfounded empirical evidence in this debate. But if, as this Article will show, these studies suffer from serious flaws, much of the perceived empirical knowledge about the real economic effects of a change in the threat of takeovers has to be reassessed. In the end, decades of empirical studies have yielded little empirical knowledge.
Statistical studies over the last forty-five years show that, although there are success stories, very many mergers and acquisitions do not result in the increased operating profits that economics ...textbooks would lead one to expect. As consultancy McKinsey have put it, ‘Anyone who has researched merger success rates knows that roughly 70% fail’. Yet—mysteriously—M&A activity has boomed across the globe, with a forty-fold increase in deals done each year now compared with four decades ago, in spite of the adverse general evidence. How can it be that talented, energetic, highly skilled, law-abiding, income-maximising participants in the M&A market will often promote mergers that lead to no operating gains, frequently with adverse effects on the wider economy too? Drawing on findings from a wealth of statistical analyses and case evidence from many businesses, the book presents answers to this merger mystery. In a synthesis of ideas from several disciplines, solutions are detected in misaligned incentives, distorted financial engineering and information asymmetry. By revealing how weaknesses at multiple points can interact and cumulate to produce inefficient outcomes, the discussion serves as a corrective to the overwhelmingly positive tone of most commentary on M&A, whilst also advocating changes in participants’ contracts, in taxation, and in regulation which could significantly reduce the number of mergers that fail. Designed to be accessible to a wide readership, the book will be of interest to investors, to M&A practitioners and commentators, to researchers and students of economics, political economy, finance, management and accounting, and—importantly—to policy makers working in these areas.
A Theory of the REIT Oh, Jason S; Verstein, Andrew
The Yale law journal,
01/2024, Letnik:
133, Številka:
3
Journal Article
Real Estate Investment Trusts (REITs) are companies that raise money from the public to invest in real estate. Despite REITs being a vast and growing part of the economy, legal scholars have paid ...them almost no attention. Accordingly, no one has noticed that REITs possess several unique and puzzling legal characteristics. REITs are the only American business form that are forbidden from reinvesting their profits. They are also uniquely immune to hostile takeovers. Since reinvestment and takeovers are thought to be good for investors (at least on average), REIT law would seem to be an obstacle to REIT growth. Yet, REITs have grown feverishly for decades. We offer a theory to account for the growth of REITs. We suggest that REITs succeed because of-not despite-their mysterious legal attributes. We argue that their superficially inefficient rules that bar reinvestment and takeovers interlock as part of an efficient solution to tax-induced lock-ins and investor conflicts inherent in real estate markets. Our theory is important because it clarifies the underlying logic of REIT law, which is highly technical and may appear arbitrary. Clarity allows us to evaluate reforms to the real estate sector. Our theory also links the REIT back to mainstream corporate-governance and tax scholarship, illustrating how an overlooked business form sheds light on some of the fields' central debates.
Celotno besedilo
Dostopno za:
DOBA, IZUM, KILJ, NUK, PILJ, PNG, PRFLJ, SAZU, SIK, UILJ, UKNU, UL, UM, UPUK
Volume 20 of Advances in Mergers and Acquisitionsexplores a range of issues relevant to a post-Covid world and the ensuing recession and is of interest to scholars in strategic management, ...organization theory, and organizational behaviour who are studying questions around mergers and acquisitions.
The principal-principal perspective is tested and extended in the context of corporate takeovers of Chinese publicly listed firms from 1998 to 2007. The resistance of a target firm's controlling ...shareholder toward potential takeovers reflects the conflict between the principal and minority shareholders. It was found that this resistance weakens when target firms are located in regions with more institutional development, where the minority shareholders' interests are better protected. The resistance also decreases for target firms with CEOs who are politically connected, as these CEOs may be more interested in their own political careers than in representing the interests of the controlling shareholders.
Game Strategies for Business Integration in the Digital Economyreveals the essence, features and benefits of various strategies for business integration in the digital economy.
Exploiting a novel measure of firm complexity based on textual analysis (Loughran and McDonald, 2020), we explore the effect of hostile takeover exposure on firm complexity. Our results demonstrate ...that more takeover vulnerability leads to less complex firms. Hostile takeover threats diminish managers’ job security and thus exacerbates managerial myopia. Short-sighted managers focus on short-term investments at the expense of more complex, long-term, projects, resulting in lower corporate complexity. Our measure of takeover susceptibility is principally based on state legislation, which is plausibly exogenous. Therefore, our results are more likely to reflect causality than merely an association. Further analysis corroborates the results including propensity score matching, entropy balancing, an instrumental-variable analysis, and using Oster’s (2017) method for testing coefficient stability.
This article explores the phenomenon whereby disabled people's homes are being occupied (i.e. cuckooed) by local perpetrators and/or county lines organised criminal groups. This study employs a ...qualitative biographical methodology that collects data from disabled people who have been victimised this way and practitioners who have worked with them. The findings illustrate that social isolation, loneliness and a lack of community services can create a space where the exploitation of disabled people can flourish. We conclude by demonstrating that cuckooing predominantly occurs at a local level, perpetrated by local people, rather than by county lines organised criminal groups; that, in fact, local cuckooing can predate county lines takeovers.
