This would explain why staggered boards and incorporation in states with more anti-takeover statutes
can deter future activist interventions, while the poison pill, surprisingly, does not.
THE PILL'S INGREDIENTS The Mechanics of the Pill The Judicial Response IV ADAPTIVE RESPONSES TO THE PILL Corporate Governance Responses Strategic Responses Activist Investors and Shareholder Rights By-Laws Anti-Takeover Statutes
Modifications to Poison Pills V WHY CANADA IS DIFFERENT Canadian Securities Regulatory Framework Structure of Canadian Capital Markets Duties of Directors in Canada Canadian Regulatory Philosophy Canadian Poison Pill Jurisprudence Suggestions For the Future VI CONCLUSION
State regulation of corporate takeover activity takes two distinct forms: state corporation laws, which govern the activities of corporate entities chartered within that state (139) and state anti-takeover statutes
, which operate in a fashion similar to the Williams Act.
Compared to most states, which have adopted multiple anti-takeover statutes
of ever-increasing ferocity, Delaware's single takeover statute is relatively friendly to hostile bidders.
These concerns have reinforced the calls of those seeking to restrict hostile takeovers by, for example, anti-takeover statutes
in some American states and proposals for shareholder ratings changes in the UK.
Although proxy contests (also called proxy battles, fights, and wars) were infrequently used as a means of gaining control of publicly traded corporations or of influencing management policy decisions during the 1980s, recent changes in the United States business environment -- the limited availability of financing for corporate takeovers, the collapse of the junk bond market, the passage of anti-takeover statutes
in 40 states and proliferation of anti-takeover defense tactics, and the active role institutional investors are now taking in the governance of American corporations -- the proxy contest has now become a very important and leading tool in battles for corporate influence and control.
While merger and acquisition activity should continue at a somewhat reduced level, proxy contests, which are fertile ground for mismanagement charges, are expected to multiply Virtually all proxy fights spawn associated lawsuits, challenging either the proxy process itself or state anti-takeover statutes
State anti-takeover legislation has drawn opposition from free-market economists, regulatory officials, constitutional theorist who argue that state anti-takeover statutes
violate the commerce clause of the constitution, and those interested in buying companies.
On September 23, 2004, the Fund's Board announced its opposition to the Trusts' tender offer and took a series of steps designed to defeat the offer, including issuing shares of the Fund's common stock to its sub-adviser, relying on that issuance in an attempt to subject the Fund and the Trusts to two anti-takeover statutes
under Maryland law, adopting the poison pill, authorizing a self tender for up to 943,704 shares at a price of $20.
On September 23, 2004, the Fund's Board announced its opposition to the Trusts' tender offer, and described a series of steps designed to defeat the offer, including issuing shares of the Fund's common stock to its sub-adviser, relying on that issuance to subject the Fund and the Trusts to two anti-takeover statutes
under Maryland law (the fund is incorporated in Maryland), authorizing a self tender for up to 943,704 shares at a price of $20.
In order to enhance the Fund's ability to respond to the Horejsi Trusts partial tender offer and to develop possible additional alternatives that are fair to all stockholders, the Board has opted into certain Maryland anti-takeover statutes
and adopted a Rights Plan.
Our proposal is based on analysis of publicly available information, subject to a standard due diligence investigation, absence of a material adverse change in York's situation, and to York's Board of Directors approving the transaction, thereby excepting the transaction from Delaware's anti-takeover statutes
and York's stockholder rights plan.