Abstract
We analyze the relation between antitakeover provisions (ATPs) and the performance of spin-off firms. We find that firms protected by more ATPs before spin-offs have higher abnormal announcement returns and greater improvements in post-spin-off operating performance than firms with fewer ATPs. Further, firms that reduce the number of ATPs after spin-offs have greater improvements in operating performance than firms that do not reduce the number of ATPs. Finally, CEOs of pre-spin-off firms tend to retain more ATPs in parent firms and assign fewer ATPs to the spun-off units if they remain as the CEOs of the parents but not the spun-off units. Overall, our results indicate a positive relation between ATPs and the value gains to spin-offs.
Original language | English |
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Pages (from-to) | 813-824 |
Number of pages | 12 |
Journal | Journal of Banking and Finance |
Volume | 34 |
Issue number | 4 |
DOIs | |
State | Published - Apr 2010 |
Keywords
- Antitakeover provisions
- Managerial entrenchment
- Shareholders' interest
- Spin-offs
ASJC Scopus subject areas
- Finance
- Economics and Econometrics