Title: Takeovers, corporate control, and return to target shareholders

Authors: Han Donker, Saif Zahir

Addresses: College of Science and Management, University of Northern British Columbia, Canada. ' College of Science and Management, University of Northern British Columbia, Canada

Abstract: In this paper, we investigated the impact of ownership concentration on the returns to target shareholders. In order to determine such impact, we have employed three models namely: the atomistic shareholder model; the large shareholder model; the single shareholder model. We found empirical evidence that the degree of ownership concentration in target firms has a significant negative effect on the returns to shareholders. These findings are consistent with the theoretical takeover models which support a negative relationship between bid premium and ownership concentration of target firms.

Keywords: takeovers; free-rider problem; corporate control; ownership structure; corporate governance; atomistic shareholders; large shareholders; single shareholders; shareholder returns.

DOI: 10.1504/IJCG.2008.017653

International Journal of Corporate Governance, 2008 Vol.1 No.1, pp.106 - 134

Published online: 25 Mar 2008 *

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