GOVERNANCE OF CORPORATE TAKEOVERS: TIME FOR SAY-ON-TAKEOVERS?

• 成果类型: Article
• 署名作者: Vithayathil, Joseph; Choudhary, Vidyanand
• 署名单位: Southern Illinois University System; Southern Illinois University Edwardsville; University of California System; University of California Irvine
• 刊物名称: MIS QUARTERLY
• ISSN/ISSBN: 0276-7783
• DOI: 10.25300/MISQ/2018/13575
• 发表日期: 2018
• 页码: 45-+
• 关键词: poison pill securities; information asymmetry; voting right; MARKET; WEALTH; cost; firm; disclosure; target; POWER

摘要

We study the potential for digital, online information and electronic voting to improve shareholder surplus by facilitating a new governance structure, owner-governance, which shifts control of the takeover decision from the board to shareholders. We compare analytical models of owner-governance to the current practice of delegated-governance in the context of increasing availability of online information, which increases public informedness. Our analysis shows that shareholders of the target firm and the acquirer both prefer owner-governance to delegated-governance when informedness is sufficiently high. Interestingly, we find a region where owner-governance offers a higher probability of takeover but delegated-governance offers higher shareholder surplus. Under delegated-governance, the board endogenously sets an entrenchment level that is always greater than the entrenchment level preferred by the shareholders and increasing informedness reduces the probability of a takeover. Our results suggest that owner-governance should be considered because of increasing informedness.