The Divergence of U.S. and UK Takeover Regulation

John Armour
University of Oxford – Faculty of Law; University of Oxford – Said Business School; European Corporate Governance Institute (ECGI)

David A. Skeel Jr.
University of Pennsylvania Law School; European Corporate Governance Institute (ECGI)
Regulation, Vol. 30, No. 3, Fall 2007
U of Penn, Inst for Law & Econ Research Paper No. 08-24

Abstract:

Hostile takeovers are commonly thought to play a key role in rendering managers accountable to dispersed shareholders. Yet, surprisingly little attention has been paid to the very significant differences in takeover regulation between the two most prominent practitioners of hostile takeover, the United Kingdom and the United States. In the UK, defensive tactics by target managers are prohibited, whereas in the United States, Delaware law gives managers a good deal of room to maneuver. We examine the evolution of the two regimes from a public choice perspective, and argue that the differences between the two countries is influenced by differences in the mode of regulation – that is, by who it is that does the regulating.

The Divergence of U.S. and UK Takeover Regulation

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