Abstract
We examine the initial implementation of a shareholder voting rule to identify the associated costs and benefits of shareholder approval in particular acquisitions. We find firms alter the structure of their acquisitions to avoid shareholder voting. Additional analysis suggests firms use seasoned equity offerings as a mechanism to avoid shareholder voting. We examine the performance of acquisitions following the enactment of the shareholder voting rule and find no evidence of higher short- or long-run market returns for acquisitions requiring a stockholder vote. This suggests shareholder voting adds additional costs, but no discernable benefits, to acquiring firm shareholders.
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