Do Takeover Defenses Deter Takeovers?

Do Takeover Defenses Deter Takeovers?

Jonathan M. Karpoff

University of Washington – Michael G. Foster School of Business

Robert J. Schonlau

Brigham Young University – Department of Finance

Eric W Wehrly

Albers School of Business & Economics, Dept of Finance

August 14, 2015


The G-index and E-index are used extensively in financial research to measure firms’ takeover defenses. Using instruments for a firm’s use of takeover defenses based on a firm’s geography and IPO cohort, we report the first direct evidence that the G-index and E-index are indeed negatively related to acquisition likelihood. The relation between takeover likelihood and the G-index is driven by a subset of 14 provisions, most of which are not in the E-index and four of which have positive impacts on takeover likelihood.

Do Takeover Defenses Deter Takeovers?


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