PROTECTION AGAINST HOSTILE TAKEOVER DURING THE 5th, WAVE
In his paper the author presents the methods the companies used to protect themselves against hostile takeovers between 1999 and 2005 as regards their abilities to create value for shareholders and compares them with the methods used in the 80ties. He also presents financial benefits shared both by shareholders of an attacking company and a target company. The author analyses derivative data concerning 17 attempts of hostile takeover and prices of shares of attacking and target companies quoted 3 months before a bid, during a bid and 3, 6 and 12 months after a bid was closed. He examines press articles, Reuters articles, press prices of shares, share prices on bloomberg.com and monographs. The conducted research indicates that in their protection processes management boards concentrated on methods generating an increase in the value of a target company; a bonus offered for target companies which were taken over was much higher than for companies that managed to protect themselves; share prices of attacking ones that completed a hostile takeover fell considerably below the value of their stock exchange index whereas the prices of the attacking ones which did not complete a takeover were higher than their indices. The management of the protecting companies pays more attention to the protection of value to shareholders than in the 80ties and a takeover bonus is one of the key factors of the bid success. Additionally, there is a considerable transfer of benefits from shareholders of a taking over company to shareholders of a company that is being taken over and shareholders of attacking ones, which do not complete a takeover, have higher than the average rate of return on the market.
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