Le poison pill ai tempi del Covid: le scalate ostili alle società quotate statunitensi tra nuove prospettive ed «eterno ritorno dell’uguale» (Poison Pills in the Time of COVID: A Novel Defense or An Eternal Return in Hostile Takeovers of Us Listed Companies)

2020 ◽  
Author(s):  
Pierluigi Matera ◽  
Ferruccio Maria Sbarbaro
Keyword(s):  
Listed Companies ◽  
Eternal Return ◽  
Hostile Takeovers ◽  
Poison Pill ◽  
Poison Pills

scholarly journals The effect of takeover defenses on long term and short term analysts’ earnings forecasts: The case of poison pills

2007 ◽  
Vol 4 (4) ◽  
pp. 140-144 ◽  
Author(s):  
Thomas A. Turk ◽  
Jeremy Goh ◽  
Candace E. Ybarra
Keyword(s):  
Earnings Forecasts ◽  
Security Analysts ◽  
Short Term ◽  
Takeover Defenses ◽  
Poison Pill ◽  
Poison Pills ◽  
One Year

This study examined the effect of poison pill adoption on long term and short earnings forecasts by security analysts. Our results provide no evidence of significant revisions in one-year or five-year earnings forecasts following the adoption of poison pills. We do find evidence, however, that firms adopt poison pills following a period of significant negative revisions in earnings forecasts. Our results suggest that poison pill adoptions may be a response to downward revisions in earnings forecasts

Interpreting Equivocal Signals: Market Reaction to Specific-Purpose Poison Pill Adoption

2016 ◽  
Vol 44 (5) ◽  
pp. 1953-1979 ◽  
Author(s):  
Donald J. Schepker ◽  
Won-Yong Oh ◽  
Pankaj C. Patel
Keyword(s):  
Information Asymmetry ◽  
Signaling Theory ◽  
Important Process ◽  
Contextual Cues ◽  
Self Selection ◽  
Inside Directors ◽  
Poison Pill ◽  
Sensemaking Process ◽  
Poison Pills

Signaling theory suggests that firms send signals to stakeholders to reduce information asymmetry. Research, however, has rarely examined how investors interpret signals that are equivocal. We suggest that sensemaking serves as an important process by which investors interpret firm signals, and salient contextual cues influence the sensemaking process. We examine an equivocal signal, the adoption of a poison pill, as a means of examining investor interpretation of the signal and the role of contextual cues in influencing interpretation. Using a sample of 578 poison pill adoptions and controlling for self-selection, we find that investors react negatively to poison pills adopted to protect net operating losses (NOL poison pills) but positively to poison pills adopted when the firm is in receipt of a takeover offer (in-play poison pills). Assessing the role of contextual cues, our results suggest that CEO duality, the proportion of inside directors on the firm’s board, the firm’s R&D investments, and industry concentration also condition investor response to specific-purpose poison pill adoption. Our study contributes to research on signaling theory, sensemaking, and corporate governance by examining how investors interpret a firm’s equivocal governance decisions.

scholarly journals Is there power behind the dead hand? An empirical investigation of dead hand poison pills

2009 ◽  
Vol 7 (1) ◽  
pp. 370-379
Author(s):  
Katherine I. Gleason ◽  
Mark S. Klock
Keyword(s):  
Economic Theory ◽  
Empirical Study ◽  
Empirical Investigation ◽  
Shareholder Rights ◽  
Poison Pill ◽  
Proxy Contest ◽  
The Dead ◽  
Poison Pills

Dead hand poison pills prevent potential hostile acquirers from circumventing a poison pill with a proxy contest whereby newly elected directors could redeem the pill. Dead hand provisions only permit continuing directors to redeem. Shareholder rights advocates and legal scholars have criticized dead hand poison pills as an assault on shareholder governance, but economic theory suggests potential shareholder benefits. We provide the first empirical study of dead hand poison pills. We find that adoption of dead hand poison pills leads to gains for shareholders and losses for bondholders. This supports Schwert’s (2000) conjecture that poison pills provide shareholders with better premiums rather than entrench ineffective managers.

scholarly journals The importance of board composition and committee structure: The case of poison pills

2004 ◽  
Vol 1 (3) ◽  
pp. 81-95 ◽  
Author(s):  
Wallace N. Davidson III ◽  
Ted Pilger ◽  
Andrew Szakmary
Keyword(s):  
Executive Committee ◽  
Market Reaction ◽  
Board Composition ◽  
Board Committees ◽  
Poison Pill ◽  
Poison Pills ◽  
Absolute Control ◽  
Composition Characteristics

We examine board composition, characteristics, and structure for firms whose boards adopt poison pills. We find that board composition is unrelated to the stock market’s perception of poison pill adoption. However, the percentage of shares held by blockholders, the tenure of independent outsiders on the board, and the proportion of outsiders on the executive committee do seem to influence whether a poison pill adoption is perceived as management entrenching or not. We also find that when boards have absolute control of the sample firms, this control is related to board shareholdings, board tenure of outsiders, and the proportion of outsiders on the board committees. It is not related to the market reaction for poison pill adoption.

scholarly journals The Future of Poison Pills in Canada: Are Takeover Bid Reforms Needed?

2016 ◽  
Vol 61 (1) ◽  
pp. 1-29 ◽  
Author(s):  
Anita Anand
Keyword(s):  
Boards Of Directors ◽  
Shareholder Rights ◽  
Hostile Takeover ◽  
Legal Regime ◽  
Poison Pill ◽  
The Future ◽  
Poison Pills ◽  
Takeover Bids

The rules regarding shareholder rights plans, also known as “poison pills”, ensure that boards of directors facing a hostile takeover bid can retain a poison pill for a period of time in order to search for other potential offers. Over the years, the period of time has grown in length from twenty to thirty-five days and the Canadian Securities Administrators (CSA) have recently proposed a 120-day period during which takeover bids would remain open. In light of the historical rationale of takeover bid law to protect the interests of target shareholders, this article argues that the legal regime should not allow an extensive bid period of 120 days. While other aspects of the CSA proposal are sound, a lengthy bid period disadvantages both target shareholders and bidders and will ultimately deter bids from occurring.

The endogeneity of poison pill adoption and unsolicited takeovers

2018 ◽  
Vol 14 (1) ◽  
pp. 23-36
Author(s):  
Duc Giang Nguyen
Keyword(s):  
Firm Value ◽  
Negative Impact ◽  
Probability Model ◽  
Probit Model ◽  
Deterrent Effect ◽  
Content Type ◽  
Poison Pill ◽  
Negative Effect ◽  
Poison Pills ◽  
Linear Probability

Purpose Poison pill adoption is often considered as the most effective tactic to fend off an unsolicited takeover bid. However, it is difficult to identify the deterrent effect because the adoption is naturally endogenous. The purpose of this paper is to use plausibly exogenous instruments to mitigate the endogeneity problem. Design/methodology/approach The author employs two econometric models: the linear probability model and the bivariate probit model to examine the effect of poison pills on the outcome of a takeover. Findings Using a sample of 655 unsolicited takeovers, the author finds that poison pills substantially reduce the likelihood that a takeover bid, once undesirably placed, is completed. This negative impact strongly supports the manager entrenchment hypothesis in that managers adopt poison pills to ensure the continuation of their private benefits. However, the author finds no strong evidence consistent with the shareholder interest hypothesis that poison pills enhance the management’s ability to negotiate higher premiums or reject inadequate offers. Research limitations/implications The demise of the market for unsolicited takeovers with the disappearance of poison pills can be explained by the fact that poison pills, if adopted, will have an absolute deterrent effect on the takeover likelihood of success, and targets always have the power to adopt them instantly. Practical implications There should be policies to limit the power of managers to adopt poison pills because it causes the entrenchment problem which will negatively affect the firm value. Originality/value The author tackles the problem of the endogeneity of poison pill adoptions. The author shows that poison pills have a strong negative effect on the takeover outcome and the result can explain the decreasing number of unsolicited takeovers.

scholarly journals Crisis Poison Pills

2020 ◽  
Author(s):  
Ofer Eldar ◽  
Michael D Wittry
Keyword(s):  
Positive Reaction ◽  
Stock Prices ◽  
Stock Price ◽  
High Exposure ◽  
Price Increases ◽  
Poison Pill ◽  
Poison Pills ◽  
Number Of Firms

Abstract We show that a large number of firms adopt poison pills during periods of market turmoil. Specifically, during the coronavirus pandemic, many firms adopted poison pills following declines in valuations, and stock prices increased upon the announcement of firms’ poison pill adoption. Stock price increases are driven by (1) firms in which activist shareholders acquire ownership stakes and (2) firms in industries that had high exposure to the crisis. Likewise, we find a positive reaction to pills with provisions directed at stalling activists’ interventions. Our results suggest that crisis pills that target potentially disruptive ownership changes may benefit current shareholders.

scholarly journals Poison pills and CEOs: The résumé matters

2012 ◽  
Vol 8 (2) ◽  
pp. 24-43
Author(s):  
Douglas Sanford Jr ◽  
Yong-Yeon Ji ◽  
Won-Yong Oh
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Business Education ◽  
Fortune 500 ◽  
Managerial Practices ◽  
Top Managers ◽  
Poison Pill ◽  
Poison Pills ◽  
The Relationship ◽  
Ceo Characteristics

Previous research has linked poison pill to corporate governance characteristics such as ownership structure and board composition while overlooking the attributes of top managers involved in poison pill decision. Based on upper echelons perspective, we changed the focus by investigating the effect of CEO characteristics on poison pills, as measured by age, business education, and outside directorships. Using a sample of Fortune 500 manufacturing firms, we found that CEO business education is positively associated with poison pills, while CEOs’ outside directorships are negatively associated with poison pills. Furthermore, we found that CEO duality moderates the relationship between CEO business education and poison pills. We make implications for both corporate governance research and managerial practices regarding firms’ anti-takeover provisions

scholarly journals The effect of Delaware law on firm value: Evidence from poison pill adoptions

2010 ◽  
Vol 6 (2) ◽  
pp. 53-69
Author(s):  
Terry L. Campbell IIa ◽  
Raj Varma
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Corporate Law ◽  
Best Interest ◽  
Role Of The State ◽  
Poison Pill ◽  
Poison Pills ◽  
And Control ◽  
To Receive

As the leading location for firm incorporations and corporate law, Delaware occupies a unique place in corporate governance and control. In this paper, we provide fresh evidence on whether Delaware’s dominance arises from its takeover laws being in the best interest of shareholders versus managers by investigating the role of the state in which a firm is incorporated on the firm’s adoption of a poison pill. Our results indicate that announcements of adoptions of poison pills by Delaware firms are associated with returns not significantly different from those for non-Delaware firms. Moreover, Delaware firms that adopt poison pills are no more likely to receive a takeover bid, be successfully acquired, or receive better merger terms than non-Delaware firms. Overall, it appears that Delaware law, with regards to takeovers, promotes an environment consistent with a “race to the middle” philosophy, neutral to management and shareholders.

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