search query: @author Austen-Smith, D. / total: 3
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| Author: | Austen-Smith, D. O'Brien, P. C. |
| Title: | Takeover defences and shaleholder voting |
| Journal: | Economica
1992 : MAY, VOL. 59:234, p. 199-219 |
| Index terms: | SHAREHOLDERS VOTING MERGERS ORGANIZATIONAL DECLINE |
| Language: | eng |
| Abstract: | The question addressed in the article is why do shareholders vote for anti-takeover devices that apparently lower the value of their firm? A model is constructed in which rational, informed and value-maximizing shareholders vote on requests for such devices made by self-interested management with employment opportunities outside the firm. Sufficient conditions are found for the value of the firm to decline as a result of a request, though it is approved by shareholders. In the model the apparently paradoxical voting behaviour occurs because the expected takeover premium would be reduced more by rejection of the request than by approval, so shareholders rationally choose approval. |
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