Director networks and takeovers

Renneboog, Luc and Zhao, Yang ORCID: 0000-0002-5018-6953 (2014) Director networks and takeovers JOURNAL OF CORPORATE FINANCE, 28. pp. 218-234. ISSN 0929-1199, 1872-6313

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Abstract

We study the impact of corporate networks on the takeover process. We find that better connected companies are more active bidders. When a bidder and a target have one or more directors in common, the probability that the takeover transaction will be successfully completed augments, and the duration of the negotiations is shorter. Connected targets more frequently accept offers that involve equity. Directors of the target firm (who are not interlocked) have a better chance to be invited to the board of the combined firm in connected M&As. While connections have a clear impact on the takeover strategy and process, we do not find evidence that the market acknowledges connections between bidders and targets as the announcement returns are not statistically different from those bidders and targets which are ex ante not connected.

Item Type:	Article
Uncontrolled Keywords:	Mergers and acquisitions, Director networks, Centrality, Connections
Depositing User:	Symplectic Admin
Date Deposited:	03 Feb 2020 08:41
Last Modified:	16 Jun 2026 11:52
DOI:	10.1016/j.jcorpfin.2013.11.012
Related Websites:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3073021
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