Transcript Patterns in Takeover Regulations in the World: Puzzles and

Patterns in Takeover Regulations
in the World:
Puzzles and Explanations
9 September 2011
Hideki Kanda
University of Tokyo
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• Capital Market: Global
• Regulation of Takeovers: National and Not
Harmonized
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• Multiple Purposes of Regulation on
Takeover Bids
– Transparency
– Procedural Fairness
– (with Mandatory Bid Rule) Exit Protection for
Minority Shareholders with an "Equitable
Price"
• This makes the picture complex.
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• An Example: Definition of "Acting in
Concert"
– Regulation of Takeover Bids
– Ownership Disclosure Rule
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• Puzzles
– UK vs. US
– Mandatory Bid Rule with or without Board
Neutrality Rule
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Share Ownership Pattern:
Popular Thinking
OWNERSHIP
dispersed
concentrated
UK
US
Continental
Europe
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TABLE 1: Takeovers and Defenses
mandatory bid rule
no
yes
board neutrality
yes
no
UK
US
Germany
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Currently Popular Thinking:
Legal and regulatory rules (and their enforcement) on publicly held
business corporations are explained by share ownership patterns:
dispersed or concentrated.
Problem:
It is difficult to locate (and explain) the UK and Japan, for example.
Possible Thought:
The dimension of "control" should be added to that of "ownership."
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Adding "Control" to "Ownership"
ownership
control
strong
managers
strong
shareholders
dispersed
concentrated
US
Continental
Europe
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TABLE 2: Ownership and Control
ownership
dispersed
concentrated
strong
managers
US
Japan
strong
shareholders
UK
Continental
Europe
control
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• A Puzzle within Continental Europe
– French AMF vs. German BaFin in the Review
of Price under Mandatory Bid Rule
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• Tentative Conclusion
– Other Examples?
– Observed variety is understandable and
within a reasonable range....
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