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THE INEFFICIENT MANAGEMENT AND DISCIPLINARY MOTIVES FOR TAKEOVER IN AUSTRALIA
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Martin Bugeja 
, Raymond da Silva Rosa
Abstract
The disciplinary motive and removal of inefficient target management are widely cited as explanations for takeovers. This study tests the prevalence of these explanations using Australian takeover targets from 1990 to 2002. We find that the vast majority of target firms are unlikely candidates for disciplinary action. Contrary to the disciplinary hypothesis, we find that target shareholdings are highly concentrated and are more concentrated than non-target firms. Unlike Agrawal and Jaffe’s (2003) US study, we find ASX targets are typically poor performers but, contrary to the inefficient management hypothesis, we find that takeover success is higher for better performing targets.
Keywords: Mergers and Acquisitions, Takeovers, Disciplinary Motive, Corporate Governance
How to cite this paper: Bugeja, M., & da Silva Rosa, R. (2007). The inefficient management and disciplinary motives for takeover in Australia. Corporate Ownership & Control, 5(1-3), 469-481. https://doi.org/10.22495/cocv5i1c3p6
