Vote Avoidance and Shareholder Voting in Mergers and Acquisitions

Vote Avoidance and Shareholder Voting in Mergers and Acquisitions

Kai Li, Tingting Liu, Julie Wu

Series number :

Serial Number: 

Date posted :

January 15 2017

Last revised :

September 16 2019
SSRN Share


  • vote avoidance; shareholder voting; mergers and acquisitions; acquirer announcement returns; regression discontinuity design; agency problems

We examine whether, how, and why acquirer shareholder voting matters. We show that acquirers with low institutional ownership, high deal risk, and high agency costs are more likely to bypass shareholder voting. Such acquirers have lower announcement returns and make higher o ers than those who do not.

To avoid a shareholder vote, acquirers increase equity issuance and cut payout to raise the portion of cash in mixed-payment deals. Employing a regression discontinuity design, we show a positive causal e ect of shareholder voting con- centrated among acquirers with higher institutional ownership. We conclude that shareholder voting mitigates agency problems in corporate acquisitions.

Published in

Published in: 
Publication Title: 
Review of Financial Studies
Vol. 31, Issue 8, pp. 3176-3211, 2018


Real name:
Research Member
UBC Sauder School of Business
Real name:
Julie Wu
University of Nebraska-Lincoln