Why Continental European Takeover Law Matters

18 Pages Posted: 7 Feb 2004  

Allen Ferrell

Harvard Law School; European Corporate Governance Institute (ECGI)

Date Written: December 2003

Abstract

This paper addresses the following question in the context of considering the recommendations of the High Level Group of Company Law Experts on Takeover Bids: Why does Continental European takeover law matter given the concentrated ownership structure of most Continental European firms? In answering this question, the paper discusses the interaction between takeover rules and ownership structure and the possible lessons that can be drawn from the British and American experience with takeover regulation. While a ban on the use of defensive tactics without shareholder approval (possibly in conjunction with a mandatory bid rule) can theoretically have the effect of either encouraging or discouraging the adoption of dispersed-ownership structures, the empirical evidence suggests that the former would be the more likely result. Moreover, the British and American experience highlights the importance of adopting a takeover regime earlier rather than later in time.

JEL Classification: G34, G38, K22

Suggested Citation

Ferrell, Allen, Why Continental European Takeover Law Matters (December 2003). Harvard Law and Economics Discussion Paper No. 454. Available at SSRN: https://ssrn.com/abstract=500125 or http://dx.doi.org/10.2139/ssrn.500125

Allen Ferrell (Contact Author)

Harvard Law School ( email )

Griswold 303 1525 Massachusetts Avenue
Cambridge, MA 02138
United States
(617) 495-8961 (Phone)
(617) 495-1110 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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