مقررات ضد تصاحب و پیامدهای ارزش سهام: بازنگری و چارچوب های احتمالی

This paper reviews literatures on the two competing theoretical views of the antitakeover provisions–shareholder value relationship — managerial entrenchment and shareholder interests — and offers a contingency framework to reconcile these views. This framework, based on a broader agency theory perspective and the organizational literatures on power, incorporates two key moderators: corporate board and shareholder monitoring, and draws attention to when rather than on whether antitakeover provisions enhance or erode shareholder value. Managerial responses to an active takeover market of the 1980s sparked considerable controversy Jennings and Mazzeo 1986 and Kesner and Dalton 1985. A common strategic action taken by managers even prior to a takeover bid was the adoption of antitakeover provisions, which essentially involves a change in a company’s corporate charter or operating policy that makes a takeover more expensive. Revival of merger and acquisition activity in the 1990s has reactivated the controversy because additional firms are adopting antitakeover provisions Blair 1995, Brickley 1998, Lipin 1998, Mergers and Acquisitions 1996, Myers 1996, Rouffignac 1998 and Wirth 1996. Moreover, powerful shareholders such as pension funds are increasingly challenging firms to repeal antitakeover provisions adopted during the takeover wave of the 1980s Bizjak 1998, Byrne 1999, Lindeman 1999 and McCoy 1999. At the heart of the controversy surrounding antitakeover provisions is whether these provisions enhance or detract from shareholder value. Managers believe that these provisions “represent a sound and reasonable means of addressing the complex issues of corporate policy created by the current takeover environment” (Lindeman, 1999: C1), whereas, vocal shareholders argue that these provisions “permit lackluster managers to stay on even as shareholders suffer” (Norton, 1998: 17). Academics from a variety of disciplines — law, economics, finance and management — are also sharply divided in their views about the merits of antitakeover provisions Easterbrook and 1981, Gilson 1982, Grossman and Hart 1980 and Walsh and Seward 1990. Some scholars argue that the takeover market serves as a disciplining mechanism and hence managers should not resist the market Easterbrook and 1981 and Kesner and Dalton 1985. Other scholars argue that managerial resistance to takeovers can enable managers to negotiate greater benefits for their shareholders Grossman and Hart 1980 and Jennings and Mazzeo 1986. Empirical work examining the impact of antitakeover provisions also has not provided equivocal support for either of the positions. Furthermore, little effort has been devoted to reconciling the opposing viewpoints regarding antitakeover provisions (Turk, 1992). Such an omission is unfortunate since the controversy surrounding this managerial action is likely to continually resurface with the revival of takeover activity (Norton, 1998). This paper therefore, attempts to fill this gap in the literature by reviewing competing theoretical and empirical work on antitakeover provisions and offering a contingency framework to reconcile these positions. The proposed framework recasts the debate in terms of when rather than on whether antitakeover provisions enhance or erode shareholder value. Drawing from a broader agency perspective and organizational literatures on power, it is argued that when the degree of board or shareholder monitoring is high antitakeover provisions can enhance shareholder value because these monitoring mechanisms can serve as a superior alternative to the takeover market (Pound, 1993). Alternately, when the degree of monitoring by these mechanisms is low, antitakeover provisions can erode shareholder value because managers are protected from the disciplining effects of the takeover market. The proposed contingency framework therefore embeds the debate on antitakeover provisions within a broader governance context.

Agency theory motivates the debate regarding the impact of antitakeover provisions. According to agency theory managers are considered agents of stockholders, the owners of the corporation. These agents manage the resources of the corporation, but do not bear the wealth effects of their actions. In such a situation, managers have the opportunity and incentive to make choices and decisions regarding the use of firm resources that benefit them personally at the cost of the firm, giving rise to agency problems Berle and Means 1932, Eisenhardt 1989, Fama 1980 and Jensen and Meckling 1976. To reduce agency problems, several governance mechanisms exist; one of which is the market for corporate control Manne 1965, Moerland 1995 and Williamson 1975. If managers are inappropriately or inefficiently managing the resources of the firm, an alternative team through the market for corporate control can replace these managers. Two competing theoretical perspectives, premised on agency theory, motivate the research addressing the relationship between the adoption of antitakeover provisions and shareholder interests. One view is that antitakeover provisions benefit stockholders and is known as the “stockholder interests hypothesis” Grossman and Hart 1980, Knoeber 1986, Scherer 1988 and Stein 1988. A competing viewpoint, known as the “management entrenchment hypothesis,” is that antitakeover provisions are not in stockholders’ interest Manne 1965, Walkling and Long 1984 and Williamson 1975. According to the stockholder interests hypothesis, the adoption of antitakeover provisions would have a positive impact on firm performance, for four reasons Berkovitch and Khanna 1990, Harris 1990 and Knoeber 1986. First, it is posited that the adoption of antitakeover provisions effectively creates a long-term contract with the current management team and encourages managers to make firm-specific human capital investments. Managers unprotected from the takeover market would not have the incentive to invest in firm-specific skills because these skills may not be rewarded in the labor market. Protections such as antitakeover provisions provide managers the incentive to invest in such skills, which are critical for long-term performance of the firm. Second, if managers are protected from the market through antitakeover provisions, they are more likely to invest capital in long-term projects, which may otherwise be used for fending off takeover threats or managing current earnings Pugh et al 1992 and Stein 1988. Proponents of the shareholder interests hypothesis also emphasize that managers, without protection from the market, are less likely to make long-term capital investments because these investments often have long pay off periods. Antitakeover provisions would provide managers with the incentive to invest in long-term ventures that would enhance shareholder value in the long run. Third, it is argued that antitakeover provisions provide corporate management additional veto power in takeover situations where shareholders face prisoners’ dilemma problems — a situation where shareholders are better off acting collectively, but have the incentive to act independently against their collective interests. This veto power can enable management to negotiate better deals for their stockholders (Grossman & Hart, 1980). For instance, in a takeover situation involving asymmetric information and/or unique synergy where the value of the target firm to the bidding firm is greater than the value of the target to any other bidder, antitakeover provisions provide the target management negotiating power to be able to appropriate a larger percentage of the bilateral monopoly gains DeAngelo and Rice 1983, Harris 1990 and Mahoney and Mahoney 1993. Another scenario would involve two-tier tender offers, where the bidder offers a higher price for shares acquired in the front end and makes a lower offer for shares tendered in the back end. Even though the net aggregate value offered to all shareholders of a target firm in a two-tier offer is typically lower than that offered in an uniform bid, the structure of the offer motivates target shareholders to quickly tender their shares to secure the higher price paid in the first tier (Bebchuk, 1985). This pressure to sell, termed as “distorted choice,” “collective choice problem,” or “prisoners’ dilemma” can be curtailed through a cartelized response. Antitakeover provisions enable target managements to provide a cartelized response and hold out for a higher uniform bid DeAngelo and Rice 1983 and Stulz 1988. Finally, in the case of golden parachute agreements that compensate key executives for loss of job or status as a consequence of a change in control, some authors argue that these agreements enhance the interests of stockholders because this compensation facilitates takeovers Buchholtz and Ribbens 1994 and Lambert and Larcker 1985. It is argued that golden parachutes encourage executives to be objective in evaluating alternate takeover bids, rather than focusing on whether their skills will be valued in the merged company. According to the managerial entrenchment hypothesis, antitakeover provisions result in present-value loss for the firm because costs associated with antitakeover provisions outweigh benefits of potentially higher premium Manne 1965 and Williamson 1975. It is posited that the additional veto power provided by antitakeover provisions can protect managers from the disciplining influence of the market which can result in two types of negative managerial behavior: managers indulging in shirking and/or maintaining short time horizons. First, antitakeover provisions allow managers to “featherbed” and/or shirk their responsibilities to shareholders without the threat of being displaced. Second, proponents of the entrenchment view also indicate that protection from market forces may encourage managerial aversion to risk. This aversion to risk can result in managers rejecting risky projects that may reduce short-term earnings but enhance long-term firm value (Stein, 1988).

This paper describes competing theoretical perspectives regarding the adoption of antitakeover provisions — managerial entrenchment and shareholder interests —, reviews empirical evidence and presents a contingency model to reconcile these competing views. The model builds on prior theoretical and empirical literature on agency theory and on organizational perspective on power. Board and shareholder monitoring are presented as key moderators of the relationship between antitakeover provisions and shareholder interests. The moderating effect of type of provision is also discussed. The contingency model provides a useful framework for driving future research on antitakeover provisions because it synthesizes arguments from both proponents and critics, and presents a more balanced perspective on antitakeover provisions — a topic that continues to spark controversy in light of increased takeover activity. The contingency model could also be used to examine how firms with antitakeover provisions respond to takeover bids. Researchers could explore if firms with a high degree of board or shareholder monitoring use antitakeover provisions to engage in passive, auction-inducing or competition-reducing resistance strategy in the event of a takeover bid (Turk, 1992). Auction-inducing opposition would be in the interests of target shareholders because this strategy increases competition for control of the target firm, which in turn can lead to increased gains to shareholders Thosar 1996 and Turk 1992. With regard to testing of the contingency model two issues are worth emphasizing. First, it is important to note that board and shareholder monitoring are conceptualized as continua, with a number of intermediary points between the two ends (strong and weak monitoring). Therefore, in testing the contingency model researchers should define these moderators accordingly and avoid analytical procedures that involve dividing the variables into distinct categories. Second, while extant works have examined parts of the proposed contingency model, it would be useful to test the model in a comprehensive fashion. Researchers are urged to use multivariate research designs, in order to be able to incorporate multiple measures of all moderators. Moderators may operate simultaneously on the relationship between antitakeover provisions and firm value. Furthermore, higher order interactions between moderators can be tested, such as the interaction between board monitoring and shareholder monitoring with respect to antitakeover provisions and shareholder value.