Takeovers and Value Creation: Comparative Perspectives
In an academic workshop at University of California, Davis School of Law on 26 April 2019 Jelle Nijland and Tim Verdoes presented the preliminary results of the research they conducted in cooperation with Thy Pham and Maaike Lyklama a Nijeholt. The aim of the workshop was to facilitate an in-depth comparative analysis of the relationship between takeovers and value creation from US and EU law perspectives.
In the takeover context, underlying tension between short-term and long-term perspectives, between maximization of returns for shareholders and the creation of sustainable value for business, society and the environment, comes to a head. The potential consideration of sustainability in takeovers may have an impact on business far beyond the rare cases of uninvited takeovers.
US and EU perspectives
In the United States, the focus of takeovers has been on shareholder wealth, but there has been a lot of deference given to board decision-making in the context of defenses to hostile takeovers.
In the European Union, the 2004 Directive on Takeover Bids sought to strengthen an Anglo-American style “market for corporate control”, without due consideration to the differences between the US and Europe. As a result of a divide between EU Member States on fundamental issues concerning uninvited takeovers, the Takeover Directive included numerous compromises, leading the Financial Times to call it “a sour, shriveled thing, replete with the rancid overtones of political horse-trading”.
Long term value creation
Jelle Nijland of the department of Company Law and Tim Verdoes of the department of Business Studies presented their research in a presentation titled “Long term value creation as a legal enforceable norm in a hostile takeover situation”. During the workshop other presentations were given by Jeroen Veldman, Cass Business School, Georgina Tsagas, University of Bristol Law School, Beate Sjåfjell, University of Oslo Faculty of Law / UC Berkeley Haas Business School, Afra Afsharipour, UC Davis School of Law and professor Amelia Miazad, UC Berkeley School of Law.
The discussions during the workshop laid the foundation for a conference in Oslo in 2020 in collaboration with the SMART Project.