Debtholder Responses to Shareholder Activism: Evidence from Hedge Fund Interventions

• 成果类型: Article
• 署名作者: Sunder, Jayanthi; Sunder, Shyam V.; Wongsunwai, Wan
• 署名单位: University of Arizona; Northwestern University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhu049
• 发表日期: 2014
• 页码: 3318
• 关键词: corporate; mergers; debt

摘要

We investigate the effect of shareholder activism on debtholders by examining a sample of bank loans for firms targeted by activist hedge funds. We compare loan spreads before and after intervention and show the effects of heterogeneous shareholder actions. Spreads increase when shareholder activism relies on the market for corporate control or financial restructuring. In contrast, spreads decrease when activists address managerial entrenchment. Furthermore, the effects are more pronounced when pre-existing governance mechanisms are weak. Our findings suggest that shareholder activism does not necessarily exacerbate bondholder-shareholder conflicts of interest and highlight the role of activism in aligning investors.