Vote Avoidance and Shareholder Voting in Mergers and Acquisitions

• 成果类型: Article
• 署名作者: Li, Kai; Liu, Tingting; Wu, Juan (Julie)
• 署名单位: University of British Columbia; Creighton University; University of Nebraska System; University of Nebraska Lincoln
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy065
• 发表日期: 2018
• 页码: 3175
• 关键词: regression discontinuity designs; free cash flow; corporate governance; INSTITUTIONAL OWNERSHIP; earnings management; performance; Activism; STOCK; FIRMS; INVESTMENT

摘要

We examine whether, how, and why acquirer shareholder voting matters. We show that acquirers with low institutional ownership, high deal risk, and high agency costs are more likely to bypass shareholder voting. Such acquirers have lower announcement returns and make higher offers than those who do not. To avoid a shareholder vote, acquirers increase equity issuance and cut payouts to raise the portion of cash in mixed-payment deals. Employing a regression discontinuity design, we show a positive effect on acquirer announcement returns concentrated in acquirers with higher institutional ownership. We conclude that shareholder voting mitigates agency problems in corporate acquisitions.