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The Information Content of Defence Documents in UK Hostile Takeover Bids

Author

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  • T. E. Cooke
  • R. G. Luther
  • B. R. Pearson

Abstract

This study examines the defence documents of 79 hostile take‐over bids of publicly quoted companies in the UK during the period 1988–1990 using logit regression and discriminant analysis to determine if any of the 41 identified characteristics of the defence document and seven continuous control variables lead to a higher or lower probability of a successful defence. The study finds that managers in target companies are unable to introduce new information in their defence documents that materially affects the outcome of a bid. This suggests that managers may advise shareholders to reject a bid for other reasons, such as to drive up the offer price.

Suggested Citation

  • T. E. Cooke & R. G. Luther & B. R. Pearson, 1998. "The Information Content of Defence Documents in UK Hostile Takeover Bids," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(1‐2), pages 115-143, January.
    • Handle: RePEc:bla:jbfnac:v:25:y:1998:i:1-2:p:115-143
    DOI: 10.1111/1468-5957.00180
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    Cited by:

    1. Brennan, Niamh M. & Daly, Caroline A. & Harrington, Claire S., 2010. "Rhetoric, argument and impression management in hostile takeover defence documents," The British Accounting Review, Elsevier, vol. 42(4), pages 253-268.
    2. Emmanuelle Negre & Isabelle Martinez, 2012. "Une Analyse Lexicale Des Communiques De Presse Volontaires Emis Lors Des Opa/Ope : Quels Profils De Diffusion ?," Post-Print hal-00936567, HAL.

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