Journal of Banking & Finance Vol. 34 No. 4 2010
Antitakeover provisions in corporate spin-offs
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.
- DOI
- 10.1016/j.jbankfin.2009.09.011
- Volume
- 34
- Issue
- 4
- Pages
- 813-824
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref