Corporate control contests and capital structure

Milton Harris*, Artur Raviv

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

303 Scopus citations

Abstract

This paper explores the determinants of corporate takeover methods (proxy fights versus tender offers) and their outcomes and price effects. We focus on the effect of leverage on the takeover method and outcome. The model predicts, for example, that the target's stock price appreciates less following a successful proxy contest than in a successful tender offer. In addition, we obtain several other results on price effects and on the capital structure changes that accompany contests for corporate control. Some of our results are compared with the existing empirical evidence.

Original languageEnglish (US)
Pages (from-to)55-86
Number of pages32
JournalJournal of Financial Economics
Volume20
Issue numberC
DOIs
StatePublished - Jan 1 1988

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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