Like Mitchell and Lehn (1990), I classify firms in the sample as hostile targets when they are targets of successful or unsuccessful hostile tender offers
, unsolicited and rejected offers, and proxy contests.
Control transactions--a category that includes friendly mergers, hostile tender offers
, management buyouts, freeze-outs, and sales of control by a controlling shareholder--stand at the conceptual and practical center of corporate law and governance.
A decade ago, we were talking about incentive compensation, strategic planning, management information systems, hostile tender offers
, and multinational organizations as the "new" challenges.
Finally, the seventh and eighth columns include only successful hostile tender offers
The restructuring phenomenon has raised numerous issues involving securities regulation, including the desirability of additional regulation of both bidder and target tactics in hostile tender offers
, possible protections for bondholders in restructurings, and the adequacy of disclosure in management buyouts.
Once such an agreement had been arranged, National Starch hired an investment banking firm to evaluate the offer, provide a fairness opinion and assist in the event of any hostile tender offers
15) Between the Delaware Supreme Court decisions in Revlon and Time-Warner, target boards frequently responded to hostile tender offers
by proposing a financial restructuring of the corporation, while using takeover defenses to effectively force acceptance of their proposed restructuring.
As a consequence, the legal and economic conditions in the early 1990s may appear to favor proxy contests over hostile tender offers
as a means to ensure that managers maximize firm value.
Through early support for buyout funds, hostile tender offers
and, later, shareholder resolutions and proxy battles, large investors created the "Institutional Investor Rule.
I next explore the requisite features of financial markets that can lead to the conclusion that shareholders might be better served by a legal regime of management discretion in determining the outcome of hostile tender offers