DO INDEPENDENT DIRECTORS ENHANCE TARGET SHAREHOLDER WEALTH DURING TENDER OFFERS

We examine the role of the target firm's independent outside directors during takeover attempts by tender offer. We find that when the targe t's board is independent, the initial tender offer premium, the bid pr emium revision, and :he target shareholder gains over the entire tende r offer period are higher, and that the presence of a poison pill and takeover resistance lead to greater premiums and shareholder gains. We conclude that independent outside directors enhance target shareholde r gains from tender offers, and that boards with a majority of indepen dent directors are more likely to use resistance strategies to enhance shareholder wealth.