Takeover deterrents and cross partial ownership: The case of golden shares

SERBERA, Jean-Philippe and FRY, John (2019). Takeover deterrents and cross partial ownership: The case of golden shares. Managerial and decision economics, 40 (3), 243-250.

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Official URL: https://onlinelibrary.wiley.com/doi/full/10.1002/m...
Link to published version:: https://doi.org/10.1002/mde.2998

Abstract

We analyse takeovers in an industry with bilateral capital‐linked firms in cross partial ownership (CPO). Before merger, CPO reduces the profitability of involved firms, confirming the “outsider effect.” However, the impact of CPO upon merger profitability is two‐sided in a Cournot setting. CPO, by cointegrating profits, increases output collusion leading to anticompetitive effects with facilitated mergers in most cases. Nonetheless, a protective threshold exists for which CPO arrangements can reduce the incentives for hostile takeovers. This has potentially significant regulatory implications. An illustrative example showcases the potential relevance of CPO as a defence against hostile takeovers across different industries.

Item Type: Article
Additional Information: ** Article version: VoR ** From Crossref via Jisc Publications Router **Journal IDs: pissn 0143-6570 **History: published 28-01-2019 **License for this article: starting on 28-01-2019, , http://onlinelibrary.wiley.com/termsAndConditions#vor
Uncontrolled Keywords: Management of Technology and Innovation, Management Science and Operations Research, Strategy and Management, Business and International Management
Identification Number: https://doi.org/10.1002/mde.2998
SWORD Depositor: Louise Beirne
Depositing User: Louise Beirne
Date Deposited: 08 Feb 2019 10:23
Last Modified: 04 Mar 2019 10:30
URI: http://shura.shu.ac.uk/id/eprint/23979

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