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Choice of acquisition form in Australia and the post‐takeover employment of target firm directors on the acquiring firm board

Author

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  • Martin Bugeja
  • Raymond da Silva Rosa
  • H Y Izan
  • Susan Ngan

Abstract

In Australia, a corporate acquisition can be structured as either a scheme of arrangement or a takeover. We investigate the association between deal structure and the retention of target directors on the merged entity board. We find that the odds of a target director subsequently sitting on the merged entity's board are significantly higher in schemes. The results also show that premiums are lower in schemes of arrangement when additional target directors are appointed to the board of the acquiring firm. The findings indicate that target director appointment is unrelated to the merged entity's post‐acquisition performance.

Suggested Citation

  • Martin Bugeja & Raymond da Silva Rosa & H Y Izan & Susan Ngan, 2019. "Choice of acquisition form in Australia and the post‐takeover employment of target firm directors on the acquiring firm board," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(4), pages 2235-2271, December.
    • Handle: RePEc:bla:acctfi:v:59:y:2019:i:4:p:2235-2271
    DOI: 10.1111/acfi.12307
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    Cited by:

    1. Simon Segal & James Guthrie & Johannes Dumay, 2021. "Stakeholder and merger and acquisition research: a structured literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2935-2964, June.
    2. Bedford, Anna & Bugeja, Martin & Czernkowski, Robert & Bond, David, 2023. "Is the effect of shared auditors driven by shared audit partners? The case of M&As," The British Accounting Review, Elsevier, vol. 55(2).

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