TAKEOVER BID RESISTANCE AND THE MANAGERIAL WELFARE HYPOTHESIS - EVIDENCE FROM THE CANADIAN MARKET

Managers of publicly held corporations have important fiduciary respon sibilities towards their shareholders. In order to protect their own i nterests, they may put aside these duties when their firm is the targe t of a takeover bid. Walkling and Long (1984) used the takeover market to study managerial behavior, and to infer which interests managers p rotect by their opposition. They concluded in favor of the managerial welfare hypothesis. We extended the Walkling and Long model to include the context in which the transaction takes place, as it may significa ntly affect management's behavior Variables such as competing bids, pr ior negotiations with the target's management, and financial performan ce provided additional empirical support for the managerial welfare hy pothesis.