The Shareholders’ ‘Dog’ that did not Bark: Contested Takeover Bids in Long-Run Comparative Perspective
Contested take-over bids for companies are relatively rare but nevertheless important as a way of exerting shareholder control over the actions of company managers. This chapter explores the circumstances in different sectors and countries that made such bids more or less likely to occur. The frequency of contested bids depends on a variety of factors, including the structure of shareholding, stock exchange rules, company legislation and the quality of information available to shareholders. Such bids were more common in certain sectors, notably railways, and in countries where the dispersion of ownership was more common. Measures to combat contested take-over bids included the issue of non-voting shares and corporate bonds that allowed management to raise capital but not relinquish control. The size of companies was also a factor inhibiting take-overs, though in recent years the growing importance of highly leveraged buy-outs has weakened this particular form of defence.
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