Journal
JOURNAL OF FINANCIAL ECONOMICS
Volume 126, Issue 1, Pages 54-73Publisher
ELSEVIER SCIENCE SA
DOI: 10.1016/j.jfineco.2017.06.008
Keywords
Hedge fund activism; Shareholder activism; Corporate governance; Mergers and acquisitions; Institutional investors
Categories
Ask authors/readers for more resources
Shareholder value creation from hedge fund activism occurs primarily by influencing takeover outcomes for targeted firms. Controlling for selection decisions, activist interventions substantially increase the probability of a takeover offer. Third-party bids for targets have higher returns, premia, and completion rates, but these patterns reverse when the activist is the bidder. Failed bids for activism targets lead to improvements in operating performance, financial policy, and positive long-term abnormal returns, suggesting that activism enhances value. The positive long-term performance from hedge fund activism arises from monitoring target management during merger and acquisition contests and not from target undervaluation or bidder overpayment. (C) 2017 Elsevier B.V. All rights reserved.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available