(1) In response to the growing popularity of hostile takeovers, boards of directors started to adopt increasingly severe takeover defenses
. (2) Takeover defenses
are provisions--generally found in a company's bylaws or articles of incorporation--that make it harder for activist investors and hostile bidders to gain control of a company without board support.
Cowen has demonstrated expertise with growth companies in debt and equity capital raising as well as merger and equity stakes, cross-border transactions, shareholder activist situations and takeover defenses
. Cowen's core sectors include: health care, TMT, information and technology services, consumer, industrials, energy and transportation.
The way financial economists approach takeover defenses
(46) See Jordan M Barry & John William Hatfield, "Pills and Partisans: Understanding Takeover Defenses
" (2012) 160:3 U Pa L Rev 633 at 642.
Given the ongoing debate among legal scholars as to which provisions in the G-Index constitute effective takeover defenses
, the motive for adopting the provisions in the G-Index is still being questioned.
In November, ISS released its updated policies on shareholder proposals relating to corporate audits, board practices, management and director compensation, shareholder rights and takeover defenses
, environmental and social issues and mergers and acquisitions.
and 1992, and found that firms averaged 1.71 takeover defenses
Studies on corporate governance have also focused on an examination of the link between governance and takeover defenses
. According to Lewkow and Siethoff (2005), since its inception in the 1980s in the form of shareholder rights plans, poison pills have been used by most public companies to defend against abusive takeover tactics and inadequate bids.
Corporate takeover defenses
have long been a focal point of academic and popular attention.
Such short-term thinking likely also accounts for the fact that corporate governance reform efforts continue to ignore critical long-term issues such as the impact of excessive leverage on solvency for the sake of issues like takeover defenses
and executive compensation.
Thus over the last decade or so most companies have given up their takeover defenses
and agreed to various governance and compensation reforms.