-Assignment question:
Discuss about Takeover rules are different in the USA as compared to the UK.
Critically discuss.
The information mentioned in this document is not in the proper order or form. Also, I have no clue how the plan of the essay will be structured; I believe you can put it in the right shape. (I tried to do my best to make the requirements clear), still, I believe a lot of information and references are missing. In my paper, by comparing the USA and the UK approach, I want to prove that the US has a better Takeover structure than that in the UK. And how the UK, by adopting the US approach, can encourage more merger activity.
Probably the first thing to do is the fundamental analysis. Please make sure you’ve researched it well in terms of all the areas I have updated here, you have to link it to the aspect of what direction the US is going into and the direction that England is going into post-Brexit, and the extent to which they’re going to converge or diverge (I would expect that the UK is probably going to go in a direction more of the US to try to encourage more merger activity, I would think that would be the most logical thing).
For both US and UK:
1. What are the takeover rules?
2. What the process is, what percentage you need to get corporate control (majoritycontrol in the US and the UK)
3. Debt to Equity ratio between US and UK (essential)
4. What the restrictions are on mergers, how you’d get a Fairness Opinion?
5. Business judgement rule, if you’re discharging your fiduciary duty, to what extent can you reject an offer?
6. What motivate the managers in the company? What drives them? And its impact on the takeover.
7. What defence mechanisms can you use? White knights defence, poison pills, crown jewels, there are all kinds of defences that you can use about 10 or 12, different defensive actions that you can use.
8. Anti-dilution protection is one of the most powerful things you can have. (Skadden Arps and Wachtell Lipton are the two firms that were most involved in that earlier Wachtell Lipton then went more on the defensive side)
9. Look at literature debates and get up to date.
10. Looking at the takeover rules in the US, not only to answer the question, “compare and contrast the US and the UK takeover rules” (which primarily the English rules and the rules in Delaware). But also look at state law which is more relevant, as well as federal law, but it’s a combination of federal and state law. So, you have to sort of figure that out.
11. How’s Takeover rules changed in recent times in the US and the interpretation of the law in Delaware? And for that, you have to look at big US law firms. Debbie vois, Cleary, Quinn Emanuel, plus usual LexisNexis.
12. Then, contrast it with the UK/EU approach, the UK more than the EU, because the EU is pretty moribund in mergers and acquisitions. It is in most areas. And it has much more limited due Mdiligence.
-See the Cadbury merger and the restrictions on rights for stakeholders and how their relative defence mechanisms work there. That’s also relevant, and how the defensive tools would
work there.
13. How has it changed post-Cadbury in the UK?
14. Implications post Brexit, the Brexit angle concerning the level of disclosure.
15. To what extent is the UK likely to go in a specific direction?
One direction is to align closer to the US. The other is, to some extent, try to triangulate with Europe and other markets (Chinese, Indian):
-There’s going to be an effort to do that in part, but it’s going to be tougher to do, and there’s a relatively little incentive because Europe is very fragmented. You’re not going to have a capital markets union of any size. They’ve been talking about it forever and ever and ever. They never do anything.
-But, if you look at what Boris is trying to do in terms of Science and Technology hook-ups wit the US, he’s clearly going in that direction. Look at what else he’s doing in capital markets, and he’s essentially copying the US. For example, if you look at SPACs in the US and how the UK is copying it, dual-class shares, and other stuff.
16. Take some specific financial reporting aspect, comparing the US and the UK in the direction that they’re going, especially concerning institutional investors and index investors
-For reference’s purposes, I need up to 65 footnotes (OSCOLA 4th edition); this is what the tutor asked.
Here is a sort of bibliography with relevant references I would like to be included in the paper:
1. Securities law US Act of 1933/ especially Law in Delaware
2. The UK Financial Services and Markets Act 2000 (FSMA), Recommended offer/ Takeover panel
3. The Divergence of U.S. and UK Takeover Regulation,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1025986 Most crucial reference for the paper (Highly recommended by the tutor)
4. A Comparative Analysis of Hostile Takeover Regimes in the US, UK and Japan,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1657953
5. JOHN M. OLIN CENTER FOR LAW, ECONOMICS, AND BUSINESS WHAT MATTERS IN CORPORATE GOVERNANCE? https://dash.harvard.edu/bitstream/handle/1/11224528/SSRNid593423.pdf;jsessionid=D52005EE557FE848DD79F85750343598?sequence=16. Form Over Substance? The Value of Corporate Process and Management Buy-outs https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2050027
7. M&A Break
Fees:
US
Litigation
vs.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1475354
UK
Regulation
8. Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=94043
9. Corporate Governance and Merger Activity in the United States: Making Sense of the 1980s and 1990s https://www.aeaweb.org/articles?id=10.1257/jep.15.2.121
10. Sour Chocolate: The U.K. Takeover Panel’s Improper Reaction to Kraft’s Acquisition of Cadbury
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1800468
11. Articles from Private equity firms, e.g., Texas Pacific Group, Apollo (check top private equity firms)
12. Enron Scandal company case (off-balance sheet)
13. Chrysler Bailout (2008 Bosh administration)
14. Jorge Guira writings (papers, book)
15. Warren Buffet and his talks about the float. (being able to use free money)
16. Direct listing/ SPAC (tools n the US)
17. US PP (Private Placement Section 30.03 of the Federal Reserve Act)
18. Often use the term marriage/divorce in the paper
19. Journal articles: Financial times, New York Times, Bloomberg, BBC, Deloitte website.
20. I need more primary sources as legislation, case law, and secondary sources, for both US and the UK.
21. Well organized bibliography is crucial.