The equal opportunity principle in Australian takeover law and practice: time for review?

Mayanja, James (2000) The equal opportunity principle in Australian takeover law and practice: time for review? Australian Journal of Corporate Law, 12 (1). pp. 1-19. ISSN 1037-4124


Fairness, upon which the equal opportunity rule presently governing the distribution of the takeover premium is predicated, is not the most appropriate criterion for making policy choices for Australian takeover law and practice. Pursuit of equal treatment in every takeover transaction has the potential to reduce the incidence, or success, of hostile takeover bids. Given the important role that the hostile takeover process plays in ensuring the quality of corporate management and the efficient allocation of resources within industries, a reduction in takeover activity is likely to leave shareholders and society as a whole worse off. There is thus need to review the requirement of mandatory equal treatment. In undertaking this task, policy makers would serve the interests of investors in public companies and the economic order of society generally better if they adopted shareholder and social welfare enhancement as the criterion for developing the applicable rule in this area. That criterion is likely to facilitate more hostile takeover activity, thus leaving everyone better off. This article explores ways in which the law could be reformed to achieve this objective.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Deposited with permission of publisher.
Faculty / Department / School: Historic - Faculty of Business - Department of Law
Date Deposited: 11 Oct 2007 01:02
Last Modified: 04 Oct 2013 03:42
Uncontrolled Keywords: hostile takeovers; market for corporate control; control premium; equal opportunity
Fields of Research : 18 Law and Legal Studies > 1801 Law > 180109 Corporations and Associations Law
16 Studies in Human Society > 1605 Policy and Administration > 160510 Public Policy
22 Philosophy and Religious Studies > 2201 Applied Ethics > 220102 Business Ethics
Socio-Economic Objective: C Society > 94 Law, Politics and Community Services > 9404 Justice and the Law > 940405 Law Reform

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