Hostility in Takeovers:
In the Eyes of the Beholder?
G. William Schwert
University of Rochester, Rochester, NY 14627
and National Bureau of Economic Research
Journal of Finance, 55 No.
6, (December 2000) 2599-2640.
This paper examines whether hostile takeovers can be distinguished from
friendly takeovers, empirically, based on accounting and stock performance
data. Much has been made of this distinction in both the popular and the academic
literature, where gains from hostile takeovers result from replacing incumbent
managers and gains from friendly takeovers result from strategic synergies.
Alternatively, hostility could reflect strategic choices made by the bidder
or the target. Empirical tests show that most deals described as hostile in
the press are not distinguishable from friendly deals in economic terms, except
that hostile transactions involve publicity as part of the bargaining process.
Key words: hostile takeover, poison pill, merger, tender offer, takeover
JEL Classifications: G34
Cited 229 times in the SSCI and SCOPUS through 2014
© Copyright 2000, American Finance Association
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