example_rival_takeover_521_2011 - – Capital Expenditures...

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This just in … Latest Research How do industry rivals respond to control threats? When there is a hostile takeover in your industry, firms can do three things: Nothing Take actions to reduce agency problems Adopt anti-takeover measures
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Stock Price Reaction How do following effect stock price reaction when control threat (i.e., hostile attempt to take over a rival) is announced? Free cash flow?
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Unformatted text preview: – Capital Expenditures? – Insider Ownership – Amount of takeover defenses? How do firms respond? • When hostile takeover attempt of rival is made, firms are more apt to: – Reduce investment – Increase leverage – Both cash on hand and free cash flow decline – Firms are also more likely to adopt takeover defenses (e.g., supermajority, poison pill, etc.)...
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example_rival_takeover_521_2011 - – Capital Expenditures...

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