Hostile Takeovers and the Correction of Managerial Failure
Julia Franks and Colin Mayer
Journal of Financial Economics 40, 163-181, 1996

Frank and Mayer find that, for a sample of U.K. firms, the preacquisiiton performances of the acquired firms in hostile takeovers are not significantly different from that of a control sample of firms acquired in friendly takeovers or that of a sample of non-acquired firms. However, they report that firms acquired in hostile takeovers experience a significantly higher level of top management turnover and asset restructuring, in the post acquisition period. These results provide no support to the disciplinary model of takeovers.


Determinants of the Choice of Hostile Takeover Mechanism: An Empirical Analysis of Tender Offers and Proxy Contests
Uma. V. Sridharan and Marc R. Reinganum
Financial Management 24, 57-68, 1995

Sridharan and Reinganum investigate to what extent are proxy contest and full takeover alternatives. They compare 79 hostile tender offers and 38 proxy contests and report that a proxy contest is more likely after poor stock returns and accounting performances, whereas a hostile tender offer is triggered by the target’s failure to purse profitable investment opportunities.