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TARGET BOARD STRUCTURE AND TAKEOVER-INDUCED ABNORMAL RETURNS IN THE UK
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Costas Constantinou, Lenos Trigeorgis 
, Nikos Vafeas
Abstract
We examine the link between board structure and bid-induced abnormal returns for a sample of 198 UK-based firms that became takeover targets between 1989 and 1998. As expected, takeover targets experience significant gains during the takeover announcement period. In line with a disciplinary explanation for takeovers, we find that target boards that are larger, with fewer independent directors, and a managing director chairman, experience more favorable announcement-period returns. Targets with more reputable directors and directors with greater ownership incentives, also experience more favorable announcement-period returns.
Keywords: Board of Directors, Takeovers, Bidders
How to cite this paper: Constantinou, С., Trigeorgis, L., & Vafeas, N. (2005). Target board structure and takeover-induced abnormal returns in the UK. Corporate Ownership & Control, 3(1), 101-113. https://doi.org/10.22495/cocv3i1p9
