Bond-blockholders and corporate acquisitions

IF 4.6 3区管理学 Q1 BUSINESS

Corporate Governance-An International Review Pub Date : 2023-06-06 DOI:10.1111/corg.12546

Chune Young Chung, Sunghoon Joo, Sanggyu Kang

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引用次数: 0

Abstract

Research Question/Issue

We examine whether bond-blockholders provide additional, distinct monitoring roles in merger and acquisition (M&A) processes beyond those of equity-blockholders. Using a sample of 4309 M&A deals reported between 2001 and 2010, we shed new light on the monitoring spillover effects of bondholders to shareholders in the context of M&As.

Research Findings/Insights

Our findings demonstrate a positive relationship between the presence of bond-blockholders (or a change in their position) and acquiring firms' abnormal return announcements, which supports the monitoring spillover effects from bondholders to shareholders in M&A processes. Our subsample analyses indicate that bond-blockholders are better monitors of (1) overconfident CEOs engaging in M&As, (2) CEOs exhibiting risk-taking behavior in M&As, and (3) entrenched managers participating in M&As. Moreover, we discover a positive association between the previous quarter's changes in “monitoring” bond-blockholders' positions and the acquiring firms' 3-day cumulative abnormal returns (CARs).

Theoretical/Academic Implications

In corporate finance literature, equity-blockholders have long been recognized as effective monitors. Despite the importance of debt as most firms' primary funding source, the benefits of debt for monitoring the efficiency of managers and their organizations have been largely overlooked in the existing literature. Thus, this study provides evidence on the additional and distinct monitoring roles of bond-blockholders beyond those of equity-blockholders in M&A processes and the impact of bond-blockholders on shareholders' wealth around M&A announcements.

Practitioner/Policy Implications

This study offers insights to policymakers interested in enhancing the legitimacy of corporate governance on the monitoring spillover effects of bondholders to shareholders in the context of M&As. In addition, our findings suggest that bondholders can have a long-term perspective beyond the limited time horizon of bond maturity and influence M&A processes positively. Thus, this study has significant implications for managers and practitioners interested in which investors positively affect M&As.

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债券-大股东和公司收购

研究问题/议题我们研究了在并购（M&A）过程中，债券持有人是否发挥了股权持有人以外的额外、独特的监督作用。利用 2001 年至 2010 年间报告的 4309 宗并购交易样本，我们对并购过程中债券持有人对股东的监督溢出效应有了新的认识。研究结果/启示我们的研究结果表明，债券持有者的存在（或持仓变化）与收购公司的异常回报公告之间存在正相关关系，这支持了并购过程中债券持有者对股东的监督溢出效应。我们的子样本分析表明，对于（1）参与并购的首席执行官过于自信，（2）在并购中表现出冒险行为的首席执行官，以及（3）参与并购的根深蒂固的经理人，债券持有者是更好的监督者。此外，我们还发现，上一季度 "监控 "债券持有者的持仓变化与收购公司的 3 天累计异常回报率（CAR）之间存在正相关。理论/学术意义在公司财务文献中，长期以来，股权受限股东一直被认为是有效的监督者。尽管债务作为大多数公司的主要资金来源非常重要，但现有文献在很大程度上忽视了债务对监督管理者及其组织效率的益处。因此，本研究提供了证据，证明在并购重组过程中，债券受托管理人在股权受托管理人之外发挥了额外和独特的监督作用，以及并购重组公告前后债券受托管理人对股东财富的影响。实践者/政策含义本研究为有志于提高公司治理合法性的政策制定者提供了在 M&A 背景下债券持有人对股东的监督溢出效应的见解。此外，我们的研究结果表明，债券持有人可以超越债券到期的有限时间范围，拥有长远的视角，并对 M&A 过程产生积极影响。因此，本研究对关注哪些投资者会对 M&As 产生积极影响的管理者和从业者具有重要意义。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.