Abstract
| Original language | English |
|---|---|
| Pages (from-to) | 218-234 |
| Journal | Journal of Corporate Finance |
| Volume | 28 |
| DOIs | |
| Publication status | Published - Oct 2014 |
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Keywords
- Mergers and acquisitions
- director networks
- centrality
- connections
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Director networks and takeovers. / Renneboog, L.D.R.; Zhao, Y.
In: Journal of Corporate Finance, Vol. 28, 10.2014, p. 218-234.Research output: Contribution to journal › Article › Scientific › peer-review
TY - JOUR
T1 - Director networks and takeovers
AU - Renneboog, L.D.R.
AU - Zhao, Y.
PY - 2014/10
Y1 - 2014/10
N2 - We study the impact of corporate networks on the takeover process. We find that better connected companies are more active bidders. When a bidder and a target have one or more directors in common, the probability that the takeover transaction will be successfully completed augments, and the duration of the negotiations is shorter. Connected targets more frequently accept offers that involve equity. Directors of the target firm (who are not interlocked) have a better chance to be invited to the board of the combined firm in connected M&As. While connections have a clear impact on the takeover strategy and process, we do not find evidence that the market acknowledges connections between bidders and targets as the announcement returns are not statistically different from those bidders and targets which are ex ante not connected.
AB - We study the impact of corporate networks on the takeover process. We find that better connected companies are more active bidders. When a bidder and a target have one or more directors in common, the probability that the takeover transaction will be successfully completed augments, and the duration of the negotiations is shorter. Connected targets more frequently accept offers that involve equity. Directors of the target firm (who are not interlocked) have a better chance to be invited to the board of the combined firm in connected M&As. While connections have a clear impact on the takeover strategy and process, we do not find evidence that the market acknowledges connections between bidders and targets as the announcement returns are not statistically different from those bidders and targets which are ex ante not connected.
KW - Mergers and acquisitions
KW - director networks
KW - centrality
KW - connections
U2 - 10.1016/j.jcorpfin.2013.11.012
DO - 10.1016/j.jcorpfin.2013.11.012
M3 - Article
VL - 28
SP - 218
EP - 234
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
SN - 0929-1199
ER -