Resumen de The impact of family ownership and dual class shares on takeover risk

M. Holmen, Eugene Nivorozhkin

• In this paper the relation between the use of dual class shares and the risk of takeovers is explored. The results stress the need to control for the identity of the controlling owner in studies of corporate control and firm performance. For family controlled firms, it is found that both the hazard rate of takeover and firm market value decline with the wedge between the families' voting rights and cash flow rights. It is concluded that due to non-transferable private benefits of control in family firms, dual class shares reduce the likelihood that the family will accept the terms of value enhancing takeovers and this translates into lower firm value.