Ting Ting Liu, PhD, assistant professor of finance in the Heider College of Business, has recently had a paper accepted for publication in The Review of Financial Studies, one of the top three journals in finance.
The title of the paper is “Vote Avoidance and Shareholder Voting in Mergers and Acquisitions”. This is a joint work with Kai Li from University of British Columbia and Julie Wu from University of Nebraska-Lincoln.
Please find the abstract of the paper below:
We examine whether, how, and why acquirer shareholder voting matters. We show that acquirers with low institutional ownership, high deal risk, and high agency costs are more likely to bypass shareholder voting. Such acquirers have lower announcement returns and make higher offers than those who do not. To avoid a shareholder vote, acquirers increase equity issuance and cut payout to raise the portion of cash in mixed-payment deals. Employing a regression discontinuity design, we show a positive effect on acquirer announcement returns concentrated among acquirers with higher institutional ownership. We conclude that shareholder voting mitigates agency problems in corporate acquisitions.
