TAKEOVER DEFENSES, OWNERSHIP STRUCTURE AND STOCK RETURNS IN THE NETHERLANDS - AN EMPIRICAL-ANALYSIS

This study empirically examines the relationships between a firm's tak eover defenses and its ownership structure and stock returns. Analyzin g data of Dutch listed companies, we find that multiple antitakeover d efenses are increasingly adopted when firms are characterized by relat ively lower ownership concentration. The evidence supports the hypothe sis that more concentrated ownership of shares provides more effective monitoring of managers. As defense by issuing preferred share has rec ently been the most widely adopted mechanism in the Netherlands, its i mpact on. shareholders' wealth is also analyzed. We observe the presen ce of two apposing effects of this antitakeover measure. (C) 1997 by J ohn Wiley & Sons, Ltd.