Board interlocks and the propensity to be targeted in private equity transactions

• 成果类型: Article
• 署名作者: Stuart, Toby E.; Yim, Soojin
• 署名单位: Harvard University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.03.012
• 发表日期: 2010
• 页码: 174-189
• 关键词: BOARD INTERLOCKS; Board networks; social networks; PRIVATE EQUITY; corporate governance

摘要

We examine how board networks affect change-of-control transactions by investigating whether directors' deal exposure acquired through board service at different companies affect their current firms' likelihood of being targeted in a private equity-backed, take-private transaction. In our sample of all US publicly traded firms in 2000-2007, we find that companies which have directors with private equity deal exposure gained from interlocking directorships are approximately 42% more likely to receive private equity offers. The magnitude of this effect varies with the influence of directors on their current boards and the quality of these directors' previous take-private experience, and it is robust to the most likely classes of alternative explanations endogenous matching between directors and firms and proactive stacking of board composition by management. The analysis shows that board members and their social networks influence which companies become targets in change-of-control transactions. (c) 2010 Elsevier B.V. All rights reserved.