Deal size, acquisition premia and shareholder gains

This study examines the contradictory predictions regarding the association between the premium paid in acquisitions and deal size. We document a robust negative relation between offer premia and target size, indicating that acquirers tend to pay less for large firms, not more. We also find that the overpayment potential is lower in acquisitions of large targets. Yet, they still destroy more value for acquirers around deal announcements, implying that target size may proxy, among others, for the unobserved complexity inherent in large deals. We provide evidence in favor of this interpretation.

Rethinking the ontology of the shareholder model of the corporation

Purpose – The purpose of this paper is to examine the critical assumptions lying behind the Anglo American model of corporate governance. Design/methodology/approach – Literature review examining the concept of a nexus of contracts underpinning agency theory which, it is argued, act as the platform for neo-liberal corporate governance focusing on shareholder wealth creation. Findings – The paper highlights the unaddressed critical challenge of why eighteenth century ownership structures are readily adopted in the twenty-first century. Social implications – A re-examination of wealth creation and wealth redistribution. Originality/value – The paper is highly original due to the fact that few contributions have been made in the area of rethinking shareholder value.

A experiência de empresas brasileiras com a implantação do sistema de shareholder value based management: um estudo clínico

Através de um estudo clínico que compreendeu o uso de questionário detalhado, entrevistas de profundidade e workshop de validação, é feita análise da experiência de um pequeno grupo de empresas brasileiras com a implantação do Shareholder Value Based Management, ou gestão baseada em valor. São apresentados os vários critérios de cálculo de valor utilizados e identificados os pontos fortes e fracos de cada método

Shareholder protection and stock market development

The dissertation contains five parts: An introduction, three major chapters, and a short conclusion. The First Chapter starts from a survey and discussion of the studies on corporate law and financial development literature. The commonly used methods in these cross-sectional analyses are biased as legal origins are no longer valid instruments. Hence, the model uncertainty becomes a salient problem. The Bayesian Model Averaging algorithm is applied to test the robustness of empirical results in Djankov et al. (2008). The analysis finds that their constructed legal index is not robustly correlated with most of the various stock market outcome variables. The second Chapter looks into the effects of minority shareholders protection in corporate governance regime on entrepreneurs' ex ante incentives to undertake IPO. Most of the current literature focuses on the beneficial part of minority shareholder protection on valuation, while overlooks its private costs on entrepreneur's control. As a result, the entrepreneur trade-offs the costs of monitoring with the benefits of cheap sources of finance when minority shareholder protection improves. The theoretical predictions are empirically tested using panel data and GMM-sys estimator. The third Chapter investigates the corporate law and corporate governance reform in China. The corporate law in China regards shareholder control as the means to the ends of pursuing the interests of stakeholders, which is inefficient. The Chapter combines the recent development of theories of the firm, i.e., the team production theory and the property rights theory, to solve such problem. The enlightened shareholder value, which emphasizes on the long term valuation of the firm, should be adopted as objectives of listed firms. In addition, a move from the mandatory division of power between shareholder meeting and board meeting to the default regime, is proposed.

Shareholder Value Maximization: What Managers Say and What They Do

This paper examines whether Swiss firms maximize shareholder value. To find out, we survey the goals of 313 listed and unlisted firms. We then examine whether managers’ decisions are consistent with their goals and analyze whether performance corresponds to intentions. Our results show that most managers pursue conflicting targets. Many also declare that they do not maximize shareholder value. And those who claim they do sometimes rely on investment criteria that are inconsistent with that target. Finally, we find that share-price performance is marginally better when managers claim to maximize shareholder value, particularly when stock prices have fallen.

The government as dominant shareholder : how should the taxpayers' ownership rights be exercised? : hearing before the Subcommittee on Domestic Policy of the Committee on Oversight and Government Reform, House of Representatives, One Hundred Eleventh Congress, first session.

Mode of access: Internet.

The NASCAR phenomenon: Auto racing sponsorships and shareholder wealth

This study presents the first analysis of the impact of NASCAR sponsorship announcements on the stock prices of sponsoring firms. The primary finding of the study-that NASCAR sponsorship announcements were accompanied by the largest increases in shareholder wealth ever recorded in the marketing literature in response to a voluntary marketing program-represents a striking and unambiguous stock market endorsement of the sponsorships. Indeed, the 24 sponsors analyzed in this study experienced mean increases in shareholder wealth of over $300 million dollars, net of all of the costs associated with the sponsorships. A multiple regression analysis of firm-specific stock price changes and select corporate and sponsorship attributes indicates that NASCAR sponsorships with more successful racing teams, corporate (as opposed to product or divisional) sponsorships, and sponsorships with direct ties to the consumer automotive industry are all positively correlated with perceived sponsorship success, while corporate cash flow per share (a well-known proxy for agency conflicts within the firm) is negatively related with shareholder approval.