This is so because it is a well-known fact of modern American business that Delaware offers quick and inexpensive incorporation, a low corporate tax burden, and flexibility in key corporate structural issues, including staggered terms for directors, limitations on appraisal rights, and an antitakeover statute
that promotes fair and efficient negotiation of mergers, to name a few.
Bergen Brunswig's cash tender offer is subject to certain conditions including that at least a majority of Durr-Fillauer's outstanding shares be validly tendered and not withdrawn; that Durr-Fillauer's poison pill purchase rights be redeemed by Durr-Fillauer's board or otherwise be invalidated or made inapplicable to Bergen Brunswig's offer; that the Delaware antitakeover statute
either has been complied with or is not applicable to Bergen Brunswig's acquisition of Durr-Fillauer; that Durr- Fillauer's 80 percent supermajority vote requirement either is inapplicable to Bergen Brunswig's second-step merger or that it would otherwise be satisfied; that the pending agreement between Cardinal and Durr-Fillauer be terminated in accordance with its terms and other customary conditions.
We took the action at the request of Cascade and the Gates Foundation Trust so they can have the flexibility to acquire up to 20% of Republic's shares without triggering Delaware's antitakeover statute
This analysis is consistent with the history of Delaware's antitakeover statute
9 percent threshold for the Delaware antitakeover statute
is without merit.
evidence that states with antitakeover statutes
retain more in-state
Qi and Wald (2008) determine that debt holders use more debt covenants to minimize agency costs when borrowers are incorporated in states with stronger antitakeover statutes
Capital Structure and Corporate Control: The Effect of Antitakeover Statutes
on Firm Leverage.
Indeed, the market for incorporations has not even penalized the three states that passed severe antitakeover statutes
which have been viewed as detrimental to shareholders.
State antitakeover statutes
clearly apply to publicly held companies incorporated in the state.
Because managers decided where the firm incorporated, managers could now protect their jobs by incorporating in states with antitakeover statutes
, and states could now boost tax revenues by providing them a haven.
We create an antitakeover index and a payout restriction variable for each state to proxy for the variation in antitakeover statutes
and payout restriction laws across states.