Toward Undistorted Choice and Equal Treatment in Corporate Takeovers

129 Pages Posted: 8 Aug 2003 Last revised: 5 May 2009

See all articles by Lucian A. Bebchuk

Lucian A. Bebchuk

Harvard Law School; European Corporate Governance Institute (ECGI); National Bureau of Economic Research (NBER)

Abstract

This paper proposes two objectives - undistorted choice and equal treatment - for the legal rules governing corporate acquisitions in general, and corporate takeovers in particular. Undistorted choice is essential to the efficient operation of the market for corporate assets and that equal treatment is suggested by both efficiency and fairness considerations. Current takeover rules, I argue, lead to distorted choice and unequal treatment. I therefore put forward a set of rules that would ensure undistorted choice and equal treatment in corporate takeovers without creating any significant efficiency costs. Although the analysis focuses on takeovers, it also considers the legal rules that should govern other methods of corporate acquisition.

Keywords: takeovers, mergers and acquisitions, tender offers, takeover bids, targets, acquirers

Suggested Citation

Bebchuk, Lucian A., Toward Undistorted Choice and Equal Treatment in Corporate Takeovers. Harvard Law Review, Vol. 98, pp. 1695-1808, 1985, Harvard Law and Economics Discussion Paper No. 5, 1984, Available at SSRN: https://ssrn.com/abstract=432701 or http://dx.doi.org/10.2139/ssrn.432701

Lucian A. Bebchuk (Contact Author)

Harvard Law School ( email )

Cambridge, MA 02138
United States
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HOME PAGE: http://www.law.harvard.edu/faculty/bebchuk/

European Corporate Governance Institute (ECGI) ( email )

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National Bureau of Economic Research (NBER) ( email )

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