18 Pages Posted: 23 Apr 2007 Last revised: 31 Dec 2015
According to the EC Directive on Takeover Bids, defensive measures should be authorised by the general meeting of the target company. The incumbent board can, nonetheless, search for a competing bid, a so-called white knight. The rationale underpinning this exception is that competing bids always benefit target's shareholders. In this paper I will tackle this rationale, arguing that even competing bids could generate a pressure to tender on target's shareholders and, therefore, in this case should not be considered as a benefit for them.
Suggested Citation: Suggested Citation
Mucciarelli, Federico M., White Knights and Black Knights - Does the Search for Competitive Bids Always Benefit the Shareholders of 'Target' Companies?. European Company and Financial Law Review, Vol. 3, No. 4, 2006. Available at SSRN: https://ssrn.com/abstract=981399