Blood in the water: The value of antitakeover provisions during market shocks

Scott Guernsey, Simone M. Sepe, Matthew Serfling

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


During market-wide shocks that cause large drops in stock prices, firms with more state-endorsed antitakeover provisions (ATPs) experience smaller declines in value. Two channels appear to drive this finding. First, by giving boards more bargaining power to fight opportunistic bids, firms with more ATPs extract higher takeover premiums during market shocks. Second, having more ATPs attenuates the effect of market shocks on firm value by protecting relationship-specific investments with stakeholders from disruptive takeovers. Our results suggest that ATPs benefit shareholders during market shocks when firm values are abnormally low and represent one advantage of incorporating in states with more ATPs.

Original languageEnglish (US)
Pages (from-to)1070-1096
Number of pages27
JournalJournal of Financial Economics
Issue number3
StatePublished - Mar 2022


  • Antitakeover provisions
  • Firm value
  • Market shocks
  • Relationship-specific investments
  • Takeover premiums

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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