The Market for Shareholder-Voting Rights Around Mergers and Acquisitions: Evidence from Institutional Daily Trading and Voting


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This paper explores the market for voting rights and shareholder voting around 350 mergers and acquisitions between 1999 and 2005 by examining institutional-investor trading and voting outcomes. Our results show institutions in aggregate buy shares from retail investors and hence voting rights before merger record dates. This trading is not related to trading around announcements, and thus is not simply a continuation of the latter. Trading activity and buying before record dates are positively related to voting turnout and negatively related to shareholder approval of merger proposals. Institutions' votes increase the likelihood, however small, that mergers fail and publicly communicate their displeasure to management.


Finance and Financial Management

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