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

24 Pages Posted: 17 Jul 2015

See all articles by Jay Dahya

Jay Dahya

Zicklin School of Business, Baruch College - The City University of New York

Ronan Powell

University College Dublin (UCD) - Michael Smurfit Graduate School of Business

Date Written: 1998

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.

Keywords: managerial control; hostile takeover; top management turnover; friendly takeover; ownership structure

JEL Classification: G3

Suggested Citation

Dahya, Jay and Powell, Ronan G., Ownership Structure, Managerial Turnover and Takeovers: Further U.K. Evidence on the Market for Corporate Control (1998). Multinational Finance Journal, Vol. 2, No. 1, p. 62-83 , 1998, Available at SSRN: https://ssrn.com/abstract=2631528

Jay Dahya (Contact Author)

Zicklin School of Business, Baruch College - The City University of New York ( email )

55 Lexington Ave., Box B13-260
New York, NY 10010
United States

Ronan G. Powell

University College Dublin (UCD) - Michael Smurfit Graduate School of Business ( email )

Blackrock, Co. Dublin
Ireland

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