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http://ssrn.com/abstract=1799291
 
 

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Is the Board Neutrality Rule Trivial? Amnesia About Corporate Law in European Takeover Regulation


Carsten Gerner-Beuerle


London School of Economics and Political Science

David Kershaw


London School of Economics - Law Department

Matteo Alfredo Solinas


London School of Economics - Law Department

March 30, 2011

LSE Legal Studies Working Paper No. 3/2011

Abstract:     
Whether the European Union's Takeover Directive should have adopted a mandatory neutrality rule has been the subject of much debate. As the European Commission commences its review of the Directive this debate is being reignited. A view is crystallising that the success and failure of the Directive can, in large part, be measured by the number of Member States that have opted-in, or out of the neutrality principle, or have opted-in subject to the reciprocity option. The contestability of European corporations is viewed through this lens as a function of the extent to which EU Member States have adopted an unqualified neutrality rule. This article takes issue with this viewpoint. It argues that the pre-Directive debate and the post-Directive assessment have failed to consider the core lesson of takeover defences in the United States, namely that the construction of defences and their potency are a function of basic corporate law rules. If corporate law rules do not enable the construction of takeover defences, or undermine the extent to which they can be potently deployed, then the adoption or rejection of the neutrality principle in Member States is of trivial significance. This article explores the triviality hypothesis in three central EU jurisdictions: the United Kingdom, Germany, and Italy. It concludes that, although there is variable scope to construct and deploy takeover defences in these jurisdictions, the triviality thesis is well founded.

Number of Pages in PDF File: 66

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Date posted: May 4, 2011  

Suggested Citation

Gerner-Beuerle, Carsten and Kershaw, David and Solinas, Matteo Alfredo, Is the Board Neutrality Rule Trivial? Amnesia About Corporate Law in European Takeover Regulation (March 30, 2011). LSE Legal Studies Working Paper No. 3/2011. Available at SSRN: http://ssrn.com/abstract=1799291 or http://dx.doi.org/10.2139/ssrn.1799291

Contact Information

Carsten Gerner-Beuerle
London School of Economics and Political Science ( email )
Houghton Street
London, WC2A 2AE
United Kingdom

David Kershaw (Contact Author)
London School of Economics - Law Department ( email )
Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

Matteo Alfredo Solinas
London School of Economics - Law Department ( email )
Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

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