Corporate Takeover, Management Discipline and the Law: 1st Edition (Hardback) book cover

Corporate Takeover, Management Discipline and the Law

1st Edition

By Francis A Okanigbuan Jnr

Routledge

216 pages

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Hardback: 9781138600027
pub: 2019-12-20
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Description

This book examines the effectiveness of corporate takeovers.

The dominant ideologies of corporate takeovers include synergistic gains and its managerial disciplinary role. These dominant themes are being undermined by the challenges of costly acquisitions. The UK Takeover Code is a regulatory response to the role of managers of target companies only. Also, the regulatory framework for takeovers in the United States is largely focused on target companies. The book demonstrates that managements can influence the role of takeovers, thereby undermining its synergistic and disciplinary values. Presenting an identification and evaluation of the limits of current regulatory and judicial control over the role of management during takeovers in the UK and the US -Delaware, it will identify the relevance of institutional control as an effective mechanism for addressing the challenges of managerial influence over takeover functions. It will also identify how the role of managements can be addressed with the complementary benefit to shareholder and employee interests; thereby challenging the shareholder/ stakeholder primacy debate in corporate law, particularly in relation to takeovers.

This book will be essential reading for scholars and students interested in the market for corporate control, corporate law and company law.

Table of Contents

TABLE OF CONTENTS

Part I

CHAPTER ONE

GENERAL INTRODUCTION

Abstract

1.1 Introduction

1.2 The Persistent Challenges of Corporate Acquisition

1.3 Theoretical Perspectives of Takeovers

1.4 Aim and Scope

1.5 Outline

CHAPTER TWO

THE REGULATORY FRAMEWORK OF INSTITUTIONS

Abstract

2.1 Introduction

2.2 The Neo-classical Economics and the Old Institutional Economics Theories

2.3 The Framework of the New Institutional Economics

2.4 Institutions: Levels of Development and Change

2.5 Main Streams in Economics of Institutions

2.5.1 Property Rights of Shareholders

2.5.2 Transaction Costs Economics (Costs of Takeovers)

2.5.3 Agency Relationship between Managements and shareholders

2.6 How Institutions Can Influence Market Discipline

2.7 Conclusion

CHAPTER THREE

THE THEORETICAL FRAMEWORK OF CORPORATE TAKEOVERS

Abstract

3.1 Introduction

3.2 Types of Corporate Takeover: Nature and Characteristics

3.3 The Takeover Devices

3.3.1 Direct Purchase of Shares (tender offer or open market bid)

3.3.2 Proxy Contests

3.4 The Takeover Hypotheses and Justification for Takeovers

3.4.1 The Disciplinary Hypothesis

3.4.2 The Synergy Hypothesis

3.4.3 The Hubris Hypothesis

3.5 Takeover Defences

3.6 Contractual Relationships: Agency Conflicts and Employment Issues

3.6.1 Agency conflicts

3.6.2 Employment Issues

3.6.3 The Contractual Theory of the Corporation

3.6.4 The Entity Theory of the Corporation

3.7 Conclusion

Part 11

CHAPTER FOUR

TAKEOVER REGULATION IN THE UNITED KINGDOM

Abstract

4.1 Introduction

4.2 The Historical Development of Takeover Regulation in the United Kingdom

4.3 Shareholder Protection

4.3.1 Shareholders of Target Companies

4.3.2 Shareholders of Acquiring Companies

(i) Are Shareholders of Acquiring Companies Protected from Opportunistic Behaviour of Management?

(ii) Do Shareholders of Acquiring Companies Always Record Gains From Takeovers?

(iii) Derivative Action and Personal Actions by Shareholders of Acquiring Companies

4.4 Employment Protection

4.4.1 The Transfer of Undertakings (Protection of Employment) Regulations (TUPE)

4.5 Conclusion

CHAPTER FIVE

THE REGULATORY FRAMEWORK FOR TAKEOVERS IN THE

UNITED STATES (DELAWARE)

Abstract

5.1 Introduction

5.2 The Historical Development of Takeover Regulation

5.3 Shareholders of Target Companies

5.3.1 The Williams Act of 1968

5.3.2. Target Shareholder Protection in Delaware

a) Unocal Corp v Mesa Petroleum Company

b. Revlon Inc v MacAndrews & Forbes Holdings Inc.

5.4 Shareholders of Acquiring Companies

5.4.1 Managerial Conflict of Interests

a) Market power

b) Competition among bidders

c) Managerial Hubris – Corporate Size

5.5 Costly Acquisitions and Employee Dismissal

5.6 Conclusion

CHAPTER SIX

MANAGEMENT BOARD: CORPORATE GOVERNANCE AND THE MARKET FOR CORPORATE CONTROL

Abstract

6.1 Introduction

6.2 Managements Boards and Corporate Governance Administration

6.2.1 Corporate Governance in the United Kingdom

6.2.2 Corporate Governance in the United States

6.3 The Role of Managers in Corporate Acquisitions

6.3.1 Managements of Target Companies

6.3.2 Managements of Acquiring Companies

6.4 Conclusion

Part 111

CHAPTER SEVEN

COMPLEMENTARY INTERESTS OF SHAREHOLDERS AND EMPLOYEES

7.1 Introduction

7.2 Limitations to Employment Protection in Takeovers

(a) Employees as Non-financial Stakeholders

(b) Shareholder Value Approach to Corporate Regulation

7.3 Default Beneficiaries of Corporate Acquisitions

7.3.1 Shareholders in Target Companies

7.3.2 Management Board

7.3.3 Creditors

7.4 Costs of Acquisitions and the Role of Managements

7.5 A New Paradigm for Employment Protection and Shareholder Interests

7.6 Conclusion

CHAPTER EIGHT

JUDICIAL INTERVENTION IN CORPORATE ACQUISITIONS

8.1 Introduction

8.2 Case Search Methodology

8.3 Shareholder Litigations in the United Kingdom

8.4 Judicial intervention in Delaware

8.4.1 Shareholder Application Denied

8.4.2 Successful Shareholder Application

8.5 Conclusion

CHAPTER NINE

A NEW PARADIGM FOR TAKEOVER ADMINISTRATION

Abstract

9.1 Introduction

9.2 The Dominant Role of Managements in Takeovers

9.3 Professionalising Managerial Decisions and Enhancing Market Functions

 

 

 

About the Author

Dr Francis Okanigbuan Jnr is a Lecturer in the School of Law, Liverpool John Moores University. He was a Post-doctoral Research Fellow on the Arts and Humanities Research Council funded project; ‘Business Judgment and the Courts’ in the Centre for Business Law and Practice, School of Law, University of Leeds. He was a Teaching Assistant at the University of Manchester and Tutor at the Manchester Metropolitan University. He is a graduate-member of the Institute of Chartered Secretaries and Administrators. His research interests include; takeovers (the market for corporate control), corporate law, corporate governance, law and economics of regulation and comparative law.

About the Series

Routledge Research in Corporate Law

The credit crunch of 2007 and the ensuing financial crises have led to a renewed interest in the place of corporations in the modern world and the role of law and regulation in governing their behaviour. This series looks to survey the current developments within the field of corporate law as well as mapping out future opportunities for change. The series offers a comparative approach to the subject, looking not just at North America and Europe but also at the state of affairs elsewhere in the world. Written by influential scholars, the books offer thought-provoking and often critical analyses of corporate law. The functions and legal obligations and rights of multiple stakeholders including directors, investors, governments and regulators are examined from both empirical and theoretical standpoints. Whilst being grounded in law the series also draws upon research from the disciplines of economics, management studies, sociology and politics in order to explore the implications of corporate law in their wider social and economic context.

Learn more…

Subject Categories

BISAC Subject Codes/Headings:
LAW000000
LAW / General
LAW014000
LAW / Commercial / General
LAW022000
LAW / Corporate