Corporate diversification, refocusing and shareholder voting

Tokbolat, Yerzhan; Le, Hang; Thompson, Steve

Abstract

We examine if shareholders' attitude towards firm diversification strategy is revealed in their votes on management-initiated acquisition and divestment proposals using data on voting by shareholders of UK public firms between 1997 and 2019. We find that voting dissent is higher for diversifying acquisitions and lower for refocusing divestments, especially when these involve diversified firms. We also find a negative relationship between diversification premium and voting dissent. Our results provide evidence that diversification characteristics of firms and deals have a significant impact on shareholders' dissent in acquisitions and divestments.

Citation

Tokbolat, Y., Le, H., & Thompson, S. (2021). Corporate diversification, refocusing and shareholder voting. International Review of Financial Analysis, 78, Article 101924. https://doi.org/10.1016/j.irfa.2021.101924

• Journal Article Type: Article
• Acceptance Date: Oct 14, 2021
• Online Publication Date: Oct 19, 2021
• Publication Date: 2021-11
• Deposit Date: Mar 1, 2022
• Publicly Available Date: Oct 20, 2023
• Journal: International Review of Financial Analysis
• Print ISSN: 1057-5219
• Peer Reviewed: Peer Reviewed
• Volume: 78
• Article Number: 101924
• DOI: https://doi.org/10.1016/j.irfa.2021.101924
• Public URL: https://nottingham-repository.worktribe.com/output/7530757
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S1057521921002490