Stock Repurchase as a Takeover Defense

• 成果类型: Article
• 署名作者: Bagnoli, Mark; Gordon, Roger; Lipman, Barton L.
• 署名单位: University of Michigan System; University of Michigan; Carnegie Mellon University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/2.3.423
• 发表日期: 1989
• 页码: 423
• 关键词: TENDER OFFERS; corporate-control; MARKET

摘要

We develop a model in which stock repurchases serve as a defence against takeovers by signaling the manager's private information about the value of the firm. the manager repurchases shares to block a takeover only if the cost of doing so is not too high. Since the cost is inversely related to the value of the firm under his management, a repurchase signals that the value of the stock is high, blocking a takeover. While a repurchase increases the expected value of the stock, it also makes the stock riskier. The model also implies that there are too few takeovers for efficiency.