The Proper Role of a Target's Management in Responding to a Tender Offer

Under existing federal and state law, a corporation's managers can resist and often defeat a premium tender offer without liability to either the corporation's shareholders or the unsuccessful tender offeror. Professors Easterbrook and Fischel argue that resistance by a corporation's...

Full description

Saved in:
Bibliographic Details
Published in:Harvard law review 1981-04, Vol.94 (6), p.1161-1204
Main Authors: Easterbrook, Frank H., Fischel, Daniel R.
Format: Article
Language:English
Subjects:
Antitrust
Business management
Business structures
Corporate management
Corporations
CORPORATISM
Defensive
Effects
Efficient markets
Financial management
FISCAL POLICY & ECONOMICS
Management
MANAGERS AND MANAGEMENT
Market prices
Maximization
ORGANIZATION CHANGE
REGULATION & REGULATORY POLICY
Rights and responsibilities
Shareholders
State court decisions
Stock prices
Stockholders
Stocks
Tactics
Target company
Tender offers
Welfare
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Under existing federal and state law, a corporation's managers can resist and often defeat a premium tender offer without liability to either the corporation's shareholders or the unsuccessful tender offeror. Professors Easterbrook and Fischel argue that resistance by a corporation's managers to premium tender offers, even if it triggers a bidding contest, ultimately decreases shareholder welfare. Shareholders would be better off, the authors claim, were such resistance all but proscribed. The authors consider, but find wanting, a number of potential criticisms of their analysis; they conclude by proposing a rule of mangerial passivity capable of controlling resistance in actual cases.
ISSN:0017-811X
2161-976X
DOI:10.2307/1340753