Journal article
Managerial Performance, Tobin's Q, and the Gains from Successful Tender Offers
Journal of financial economics, v 24(1), pp 137-154
01 Sep 1989
Abstract
An analysis of successful tender offers shows that the shareholders of high Tobin's q bidders gain significantly more than the shareholders of low Tobin's q bidders. Shareholders of low q targets generally benefit more from takeovers than do shareholders of high q targets. Prior to the announcement of the acquisition, typical bidders have persistently low q ratios, while target q ratios decline significantly during the 5 years before the tender offer. To the extent that Tobin's q measures managerial performance, the analysis shows that: 1. well-managed bidders benefit substantially from tender offers, but more so if they take over poorly managed targets, 2. well-managed targets benefit less from tender offers than poorly managed targets, and 3. the total takeover gain is highest for tender offers by well-managed bidders for poorly managed targets. The results suggest that antitakeover amendments would more adversely affect shareholders of low q targets since they would benefit the most from a takeover.
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Details
- Title
- Managerial Performance, Tobin's Q, and the Gains from Successful Tender Offers
- Creators
- Larry LangRene Stulz - The Ohio State UniversityRalph Walkling - The Ohio State University
- Publication Details
- Journal of financial economics, v 24(1), pp 137-154
- Publisher
- Elsevier Sequoia S.A
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:A1989CE39400007
- Scopus ID
- 2-s2.0-35948988013
- Other Identifier
- 991021881391204721
InCites Highlights
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics