The Rise of Anti-Activist Poison Pills

Add to your list(s) Download to your calendar using vCal

• Ofer Eldar (Duke University)
• Thursday 23 February 2023, 13:00-14:15
• CJBS, room W2.02 .

If you have a question about this talk, please contact Daniel Simmons.

We provide the first systematic evidence of contractual innovation in the terms of poison pill plans. In response to the increase in hedge fund activism, pills have changed to include anti-activist provisions, such as low trigger thresholds and acting-in-concert provisions. Using unique data on hedge fund views of SEC filings as a proxy for the threat of activists’ interventions, we show that hedge fund interest predicts pill adoptions. Moreover, the likelihood of a 13D filing declines after firms adopt “anti-activist” pills, suggesting that pills are effective in deterring activists. The results are particularly strong for “NOL” pills that, due to tax laws, have a five percent trigger. Our analysis has implications for understanding the modern dynamics of market discipline of managers in public corporations and evaluating policies that regulate defensive tactics.

This talk is part of the CERF and CF Events series.

This talk is included in these lists:

• All Talks (aka the CURE list)
• CERF and CF Events
• CJBS, room W2.02
• Cambridge Finance Workshop Series
• Cambridge Judge Business School
• Interested Talks

Note that ex-directory lists are not shown.