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Ownership Structure, Managerial Turnover and Takeovers: Further U.K. Evidence on the Market for Corporate Control

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  • Jay Dahya

    (University of Wales College of Cardiff, U.K.)

  • Ronan Powell

    (Queen's University of Belfast, Northern Ireland)

Abstract

This article investigates the impact that successful hostile and friendly takeovers have on the rates of top management change for U.K. target firms. The results shows that hostile takeovers are associated with a greater degree of both top executive and top team forced departure rates compared to that of friendly takeovers. Furthermore, prior to takeover, hostile targets have lower abnormal returns, lower profitability, higher debt, lower managerial ownership and a high ownership stake held by external block holders relative to friendly targets. The results give further support to the disciplining role of the hostile takeover

Suggested Citation

  • Jay Dahya & Ronan Powell, 1998. "Ownership Structure, Managerial Turnover and Takeovers: Further U.K. Evidence on the Market for Corporate Control," Multinational Finance Journal, Multinational Finance Journal, vol. 2(1), pages 62-83, March.
    • Handle: RePEc:mfj:journl:v:2:y:1998:i:1:p:62-83
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    References listed on IDEAS

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    Cited by:

    1. Ronan G. Powell, 2004. "Takeover Prediction Models and Portfolio Strategies: A Multinomial Approach," Multinational Finance Journal, Multinational Finance Journal, vol. 8(1-2), pages 35-72, March-Jun.
    2. Vahe Lskavyan & Mariana Spatareanu, 2006. "Ownership concentration, market monitoring and performance: Evidence from the UK, the Czech Republic and Poland," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 91-104, May.
    3. Ali-Yrkkö, Jyrki, 2002. "Mergers and Acquisitions - Reasons and Results," Discussion Papers 792, The Research Institute of the Finnish Economy.
    4. Aurelie Sannajust, 2009. "Les motivations et la performance des opérations de retrait de la cote: une revue," Post-Print halshs-00521178, HAL.
    5. Franck Missonier‐Piera & Cédric Spadetti, 2023. "The consequences of earnings management for the acquisition premium in friendly takeovers," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 50(1-2), pages 308-334, January.

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    More about this item

    Keywords

    managerial control; hostile takeover; top management turnover; friendly takeover; ownership structure;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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