Compare and contrast the regulation of the bid process and takeover defence regulation in the UK and the US and critically evaluate which jurisdiction is most likely to provide greater material protection to shareholder value from the misaligned interests of directors.
Essay title and requirements
Answer the following Question:
Compare and contrast the regulation of the bid process and takeover defence regulation in the UK and the US and critically evaluate which jurisdiction is most likely to provide greater material protection to shareholder value from the misaligned interests of directors.
Total Word Limit: 3,000 words
(excluding footnotes and appendices, bibliography, contents, tables of cases and title pages)
Referencing style: OSCOLA (footnote and bibliography)
Course name: MERGERS AND ACQUISITIONS
Guideline from lecturer:
I have set out below some basic good practice for the summative essay question.
First, the golden rule for citation of legal authorities is that you use the OSCOLA system of referencing for the main UK primary legal sources, and for the main types of secondary sources. Obviously, the rules and examples in OSCOLA are based on common practice in UK citation. When citing US case law, the exact format of a case citation depends on several factors (e.g. jurisdiction, court, and type of case), but the basic format of a case citation is as follows: [Case Name], [Volume No.] [Reporter Abbreviation] [1st Page of Case], [“Pinpoint” page/page referred] [Court] [Year] – e.g. Am. Geophysical Union v. Texaco, Inc., 60 F.3d 913, 915 (2d Cir. 1994).
Second, the essay title requires you to adopt an analytical frame rather than merely explain the law relating to takeovers in the UK and US. You must be able to apply the knowledge and understanding of selected module topics that are particularly relevant to the question proposition. In doing so, the answer provided must critically evaluate the relevant legal rules and/or academic opinions drawn from a range of disciplines and to adopt and defend a reasoned position on the issues explored.
Third, because the essay forms 100% of your assessment for this module, I am limited to providing a general advisory note about the question content and its interpretation. The note is as follows. First, the question is a comparative one, and you decide how to structure the comparison. You might choose to e.g. separate the question into two parts where the UK and US law are addressed in turn, or focus primarily on one jurisdiction but to then situate the analysis of the second system within that discussion – or something different. The choice of essay structure is one for you to determine, and the coherence of presentation forms part of the overall mark. Second, primary focus of analysis is expected to centre on the appropriate form of agency – i.e. shareholders/UK system or directors/the Delaware approach – to achieve shareholder value in a takeover situation. Are shareholders better off if directors/managers are given some insulation from unsolicited bids and therefore better able to pursue capital-intensive strategies designed to generate optimal financial returns? Or are they be better served by a system that enables changes of corporate control to easily replace management if management is not following shareholder sentiment regarding the company’s value?
This is the extent of the guidance that can be provided to you regarding the summative essay title. I hope it is helpful to you and I wish you all the best and good luck in completing the assessment.
Some important reading materials【references】need to be considered/ included:
- D. Kershaw, Principles of Takeover Regulation (2016, OUP).
- S. M. Bainbridge, Mergers and Acquisitions 4th edn., (Foundation Press, 2021) (the third edition of this book remains valuable and can be used if necessary).
Henry G. Manne, “Mergers and the Market for Corporate Control,” (1965) 73 Journal of Political Economy 110-120.
Julian Franks & Colin Mayer, “Hostile Takeovers and the Correction of Managerial Failure,” (1996) 40 Journal of Financial Economics 163-181.
Have We Learned and Where Do We Stand?,” (2008) 32 Journal of Finance 2148-2177.
Richard A. Brealy, Stewart C. Myer & Franklin Allen, Principles of Corporate Finance (McGraw Hill 10th ed. 2019), Part 10.
https://r3.vlereader.com/Reader?ean=9781260568356#
John Armour and David Skeel, Jr. ‘Who Writes the Rules for Hostile Takeovers, and Why? – The Peculiar Divergence of US and UK Takeover Regulation’ (2007) 96 Geo. L. J. 1727.
John C. Coates IV, “Mergers, Acquisitions, and Restructuring: Types, Regulation and Patterns of Practice,” available at http://www.law.harvard.edu/programs/olin_center/papers/pdf/Coates_781.pdf.
Jonathan Mukwiri, Takeovers and the European Legal Framework: A British Perspective, Ch. 1.
Brian E. Rosenzweig, “Public Versus Public Regulation: A Comparative Analysis of British and American Takeover Controls,” Duke Journal of Comparative and International Law 18 (2007) 213-237.
- Davies, ‘The Notion of Equality in European Takeover Regulation’ (2002) SSRN Research Paper, < https://papers.ssrn.com/sol3/papers.cfm?abstract_id=305979>
R v. Panel on Takeovers and Mergers, ex parte Guinness plc [1990] 1 QB 145, Court of Appeal.
R v. Panel on Takeovers and Mergers ex parte Datafin plc [1987] 1 All ER 564, [1987] QB 815, Court of Appeal.
Companies Act 2006, Part 28.
The Takeover Code, available at:
EU Takeover Directive 2004/25/EC.
Andrew Johnston, “Takeover Regulation: Historical and Theoretical Perspectives on the City Code,” Cambridge Law Journal 66(2) (2007) 422-460.
- Kershaw, ‘The Illusion of Importance: Reconsidering the UK’s Takeover Defence Prohibition’ (2007) 56 International and Comparative Law Quarterly 1-40.
- Davies, E. Schuster, E. van de Walle de Ghelcke, ‘The Takeover Directive as a Protectionist Tool?’ (2010) ECGI Law Working Paper No. 141/2010.
- Lipton, ‘Management and Control of the Modern Business Corporation: Corporate Control Transactions’ (2002) 69 University of Chicago Law Review 1037.
- Tsagas, ‘Use and Abuse of Power Changes of Corporate Control: Transfer Schemes and Shareholders’ Voting Practices in Unchartered Waters’ (2019) 4 JBL 282-303.
Jennifer Payne, “Schemes of Arrangement, Takeovers and Minority Shareholder Protection,” (2011) 11(1) Journal of Corporate Law Studies 67-97.
Gower & Davies, Ch. 29.
Lexis PSL Corporate, “Takeover Offers v. Schemes of Arrangement – Key
Advantages and Disadvantages – Comparative Table.
Lexis PSL Corporate, Schemes of Arrangement – Application of the Takeover Code. Lexis PSL Corporate, Offers and Schemes of Arrangement – A Comparision.
- M. Lafferty, L. A. Schmidt, and D. J. Wolfe, Jr., ‘A Brief Introduction to the Fiduciary Duties Under Delaware Law’ (2012) 116 Penn State Law Review 837.
- Bainbridge, ‘Exclusive Merger Agreements and Lock-Ups in Negotiated Corporate Acquisitions’ (1990) 75 Minnesota Law Review 239.
- B. Thompson, ‘Exit, Liquidity, and Majority Rules: Appraisal’s Role in Corporate Law’ (1995) 84 Georgetown Law Journal 1.
- F. Greene, ‘Corporate Freeze-Out Mergers: A Proposed Analysis’ (1976) 28(3) Stanford Law Review 487.
Richard S. Ruback, ‘An Overview of Takeover Defenses’ (available at: http://www.nber.org/chapters/c5821.pdf
- Kahan and E. Rock, ‘How I learned to Stop Worrying and Love the Pill: Adaptive Responses to Takeover Law’ (2002) 69 University of Chicago Law Review 871.
- T. Allen, J. B, Jacobs, and L. E. Strine, Jr., ‘The Great Takeover Debate: A Mediation on Bridging the Conceptual Divide’ (2002) 69 University of Chicago Law Review 1067.
- Subramanian, ‘Bargaining in the Shadow of Takeover Defences’ (2003) 113 Yale Law Journal 621.
- Bebchuk, ‘The Case for Increasing Shareholder Power’ (2005) 118 Harvard Law Review 833.
If you need any reading materials, do not hesitate to contact me, I could provide e-resources as you wish.
