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Journal of Corporate Finance Vol. 15 No. 1 2009

The market for shareholder voting rights around mergers and acquisitions: Evidence from institutional daily trading and voting

Jennifer E. Bethel1; Gang Hu2,1; Qinghai Wang3,4,5

1 Babson College · 2 Hong Kong Polytechnic University · 3 University of Central Florida · 4 Georgia Institute of Technology · 5 Florida College

Abstract

This paper explores the market for voting rights and shareholder voting around 350 mergers and acquisitions between 1999 and 2005 by examining institutional-investor trading and voting outcomes. Our results show institutions in aggregate buy shares and hence voting rights before merger record dates. This trading is not related to proxies for merger arbitrage or trading around merger announcements, and thus is not simply a continuation of the latter. Trading and buying before record dates are positively related to voting turnout and negatively related to shareholder support of merger proposals. We explore several possible interpretations of these results.

DOI
10.1016/j.jcorpfin.2008.09.015
Volume
15
Issue
1
Pages
129-145
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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