A critical analysis of whether allowing directors to implement anti-takeover defences is beneficial for all corporate constituencies

Ensayo , 2018 , 25 Páginas , Calificación: A

Economía de las empresas - Negocios - General

This essay examines the question whether allowing directors to implement anti-takeover defences is beneficial for all corporate constituencies. Beginning with the classification of the topic in the law and economics context of the market for corporate control in Chapter 2, I will briefly outline in Chapter 3 the scenarios in which anti-takeover defences usually come into operation, namely hostile takeovers. Chapter 4 presents the most common anti-takeover defences and sets out the legal framework to what extent directors are permitted to adopt such defences in accordance with the applicable law. A distinction is made between UK and US law, with the latter focussing on Delaware law, where more than a half of all US publicly traded corporations are established. The Delaware Court of Chancery and Supreme Court have developed an extraordinary body of jurisprudence concerning corporate takeovers and anti-takeover defences. Chapter 5 points out potential impacts on the various constituencies of a company and deals with the fact why their interests have to be regarded in the takeover context. Finally, Chapter 6 critically evaluates anti-takeover defences from different stakeholder perspectives and concludes that these are not beneficial for all corporate constituencies, but for directors only.

Table of Contents

1. Introduction

2. The Market for Corporate Control

3. Hostile Takeovers

4. Anti-Takeover Defences
4.1Common Types of Anti-Takeover Defences
a)Poison Pill (Shareholder Rights Plan)
b)Staggered Board
c)Supermajority Voting Requirement
d)Director Removal for Cause
e)Change of Control Clauses / Golden Parachutes
f)White Knight and White Squire
g)Restructuring
h)Just Say No
4.2Defensive Capabilities of UK and US Companies
a)Shareholder Primacy (UK)
b)Director Primacy (US, Delaware)

5. Corporate Constituencies in the Takeover Context 1
5.1Affected Corporate Constituencies
5.2Legal Consideration of Stakeholder Interests

6.Are Anti-Takeover Defences Beneficial for All Corporate
Constituencies?
6.1Directors’ Perspective
6.2Shareholders’ Perspective
a) The Market for Corporate Control’s Disciplinary Capability and
Agency Costs
b) Coercion to Tender and Directors’ Superior Information:
Protecting Shareholders from Themselves
c)Bargaining Power and Increased Premia
d)Long-Term Shareholder Value
6.3Remaining Stakeholders’ Perspective

7. Conclusion

Bibliography

• Universidad: University of Edinburgh (Edinburgh Law School)
• Curso: Corporation Law and Economics
• Calificación: A
• Autor: Ass. Jur. Thomas Böhm (Autor)
• Año de publicación: 2018
• Páginas: 25
• No. de catálogo: V480619
• ISBN (Ebook): 9783668962699
• ISBN (Libro): 9783668962705
• Idioma: Inglés
• Etiqueta: Corporation Law and Economics, Corporate Law, Takeover, Takeover Defences, Anti-Takeover Defences, Directors, Shareholders, Stakeholders, Corporate Constituencies, Cadbury, Kraft, M&A, Bid, Market for Corporate Control, Hostile Takeover, UK, US, United Kingdom, United States, Delaware, Mergers and Aquisitions, Change of Control, Bidder, Target, Agency Costs, Disciplining, Manager, Share, Management, Capital Market, Company, Companies, Board, Proxy Contest, Poison Pill, Shareholder Rights Plan, Staggered Board, Golden Parachutes, White Knight, White Squire, Just Say No, Defensive, Takeover Code, Shareholder Primacy, City Code on Takeovers and Mergers, Non-frustration Rule, Director's Duties, Companies Act 2006, Director Primacy, Business Judgement Rule, Enhanced Scrutiny, Entire Fairness, takeover bid, Unocal, Revlon, Manne, Takeover Threat, Collective Action, Undistorted Choice, Coercion to Tender, Bargaining Power, public companies, quoted, listed