The Target Company's Management Legal Regulation Of Anti-takeover

In the last thirty years, takeover law has been the subject most hotly debated by corporate law scholars. A central issue in the debate has been whether the target's management should have power to block unsolicited tender offers. A tender offer typically presents shareholders of the "target" corporation with the opportunity to sell many if not all of their shares quickly and at a premium over the market price. Notwithstanding the apparent benefit both to shareholders of the target and to the acquirer when such offers succeed, the target's management may oppose the offer, arguing that the premium is insufficient or that the corporation would be harmed by its new owners. To defeat the offer, management may sell new shares to dilute the offeror's holdings, sell the corporation to "white knight", adopt some anti-takeover charter provisions or engage in a wide variety of other defensive tactics.The aim of this dissertation is to discuss whether the target's management has power to block unsolicited tender offers and what the implications of the discussion have for China's anti-takeover law. This dissertation analyzes the impact that takeover defensive tactics have on shareholders and argues that the target's management should not have veto power on takeover. But to be passive in face of takeover is not the proper rule of the target's management. The law should allow management to solicit competing bids as long as it does not obstruct the initial or any subsequent tender offer.Except for the foreword and the conclusion, this dissertation proceeds as follow:Part â…  introduces the concepts related to takeover, takeover defenses. After that, this part discusses some defensive tactics widely used in the international capital market.Part â…¡ presents two arguments about the impact of management's defensive actions. Examining the arguments both at the level of theory and in light of some empirical evidence, this part ends by concluding that the management's defensive action reduces returns to target shareholders.Part â…¢ discusses some arguments about what the management's proper...