TY - JOUR AU - Morck,Randall AU - Shleifer,Andrei AU - Vishny,Robert W. TI - Characteristics of Hostile and Friendly Takeover Targets JF - National Bureau of Economic Research Working Paper Series VL - No. 2295 PY - 1989 Y2 - February 1989 UR - http://www.nber.org/papers/w2295 L1 - http://www.nber.org/papers/w2295.pdf N1 - Author contact info: Randall Morck Faculty of Business University of Alberta Edmonton, AB T6G 2R6 CANADA Tel: 780/492-5683 Fax: 780/492-3325 E-Mail: randall.morck@ualberta.ca Andrei Shleifer Department of Economics Harvard University Littauer Center M-9 Cambridge, MA 02138 Tel: 617/495-5046 Fax: 617/496-1708 E-Mail: ashleifer@harvard.edu Robert W. Vishny Booth School of Business The University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-2522 Fax: 773/834-1920 E-Mail: Rvishny@gmail.com M1 - published as Randall Morck, Andrei Shleifer, Robert W. Vishny. "Characteristics of Targets of Hostile and Friendly Takeovers," in Alan J. Auerbach, ed., "Corporate Takeovers: Causes and Consequences" University of Chicago Press (1988) M2 - featured in NBER digest on 1987-07-01 AB - Compared to an average Fortune 500 firm, a target of a hostile takeover is smaller, older, has a lower Tobin's Q, invests less of its income, and is growing more slowly. The low Q seems to be an industry-specific rather than a firm-specific effect. In addition, a hostile target is less likely to be run by a member of the founding family, and has lower officer ownership, than the average firm. In contrast, a target of a friendly acquisitions is smaller and younger than an average Fortune 500 firm, and has comparable Tobin's Qs and most other financial characteristics. Friendly targets are more likely to be run by a member of the founding family, and have higher officer ownership, than the average firm. The decision of a CEO with a large stake and/or with a relationship to a founder to retire often precipitates a friendly acquisition. These results suggest that the motive for a takeover often determines its mood. Thus disciplinary takeovers are more often hostile, and synergistic ones are more often friendly. ER -