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Corporate Voting And The Takeover Debate, Paul H. Edelman, Randall S. Thomas
Corporate Voting And The Takeover Debate, Paul H. Edelman, Randall S. Thomas
Vanderbilt Law Review
Shareholder voting is the key to the outcome of hostile takeovers. The most obvious example arises when an acquirer tries to unseat a corporate board in a proxy contest for corporate control. But shareholder votes are needed in almost all other takeover settings as well. For instance, when a bidder announces a hostile tender offer, a resistant target company's board of directors will normally use its poison pill antitakeover defense, or a combination of a poison pill and a classified board, to stop its shareholders from selling their shares to the bidder, forcing the bidder to engage in at least …
Corporate Voting And The Takeover Debate, Randall Thomas, Paul H. Edelman
Corporate Voting And The Takeover Debate, Randall Thomas, Paul H. Edelman
Vanderbilt Law School Faculty Publications
For many years academics have debated whether it is better to permit hostile acquirers to use tender offers to gain control over unwilling target companies, or to force them to use corporate elections of boards of directors in these efforts. The Delaware courts have expressed a strong preference for shareholder voting as a change of control device in hostile acquisitions. To force acquirers to accept their preferences, the Delaware courts have developed a jurisprudence permitting the effective classified board (ECB), a poison pill combined with a classified board, to protect target company management from removal by a hostile tender offer …