Hostile Resistance to Hedge Fund Activism

• 成果类型: Article
• 署名作者: Boyson, Nicole M.; Pichler, Pegaret
• 署名单位: Northeastern University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy058
• 发表日期: 2019
• 页码: 771
• 关键词: poison pill securities; SHAREHOLDER ACTIVISM; corporate governance; cross-section; stock returns; liquidity; COSTS

摘要

When facing hedge fund activists, target firms often fight back. Targets with agency problems and those confronting the threat of investor coordination frequently engage in hostile resistance by implementing governance changes associated with managerial entrenchment. The market negatively responds to hostile resistance, and unless hedge funds counterresist, these campaigns have worse operating performance, faster activist exit, and fewer mergers than do campaigns without hostile target resistance. By contrast, when hedge funds counterresist with proxy fights, lawsuits, or unsolicited tender offers, the impact of hostile target resistance is reversed, and these campaigns have similar outcomes to campaigns without hostile target resistance.