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Antitakeover Statute

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Antitakeover Statute
A law at the state level prohibiting hostile takeovers in certain circumstances. Different states have different antitakeover statutes, but most involve some way of limiting a potential acquirer's ability to take a bid directly to shareholders. Critics contend that these laws can work against shareholder interest, while proponents maintain that they promote stability in publicly-traded companies. Antitakeover statutes can only apply to companies registered in states having such laws.

antitakeover statute
A state law that makes it easier for a firm based in that state to fend off a takeover hostile to the firm's management. Such a statute may actually penalize shareholders since acquisition-minded firms or individuals may be less likely to make an offer for the firm's stock.


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For example, the pill studies suffer from potentially serious endogeneity problems because poorly performing companies may be more likely to put in pills) (190) Even the ESB defense, because it is implemented at the firm level, may be endogenous to other firm-level characteristics that influence premiums, (191) In contrast, state-level antitakeover statutes can be taken as relatively exogenous to firm-level characteristics.
22, 2002) (stating that the principal purpose of the antitakeover statute was to protect "existing Maryland corporations from hostile takeovers" rather than to attract incorporations, and that the principal support for those laws came from parties interested in that protection).
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.
 
 
 
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