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Publication year
The Role of Esops in Takeover Contests.
Resource type
Authors/contributors
- Chaplinsky, Susan (Author)
- Niehaus, Greg (Author)
Title
The Role of Esops in Takeover Contests.
Abstract
This article examines both the shareholder wealth effects of employee stock ownership plans (ESOPs) announced by firms subject to takeover pressure and the takeover incidence of targets with and without ESOPs. Although we do not find that defensive ESOPs significantly reduce shareholder wealth on average, we identify two factors - the change in managerial and employee ownership due to the ESOP and the simultaneous announcement of other defensive tactics - that are associated with negative stock price reactions. We find that ESOPs are strong deterrents to takeover. ESOP targets that are acquired earn higher returns than targets without ESOPs, but the difference is not statistically significant.
Publication
The Journal of Finance
Volume
49
Issue
4
Pages
1451-70
Date
1994-09
Citation
Chaplinsky, S., & Niehaus, G. (1994). The Role of Esops in Takeover Contests. The Journal of Finance, 49, 1451–1470.
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