Patterns in Takeover Regulations in the World: Puzzles and Explanations 9 September 2011 Hideki Kanda University of Tokyo 1

Capital Market: Global Regulation of Takeovers: National and Not Harmonized 2

Multiple Purposes of Regulation on Takeover Bids –Transparency –Procedural Fairness –(with Mandatory Bid Rule) Exit Protection for Minority Shareholders with an "Equitable Price" This makes the picture complex. 3

An Example: Definition of "Acting in Concert" –Regulation of Takeover Bids –Ownership Disclosure Rule 4

Puzzles –UK vs. US –Mandatory Bid Rule with or without Board Neutrality Rule 5

6 Share Ownership Pattern: Popular Thinking OWNERSHIP dispersedconcentrated UK US Continental Europe

7 TABLE 1: Takeovers and Defenses noyes UK noUSGermany board neutrality mandatory bid rule

8 Currently Popular Thinking: Legal and regulatory rules (and their enforcement) on publicly held business corporations are explained by share ownership patterns: dispersed or concentrated. Problem: It is difficult to locate (and explain) the UK and Japan, for example. Possible Thought: The dimension of "control" should be added to that of "ownership."

9 Adding "Control" to "Ownership" dispersedconcentrated strong managers US strong shareholders Continental Europe ownership control

10 TABLE 2: Ownership and Control dispersedconcentrated strong managers USJapan strong shareholders UK Continental Europe ownership control

A Puzzle within Continental Europe –French AMF vs. German BaFin in the Review of Price under Mandatory Bid Rule 11

Tentative Conclusion –Other Examples? –Observed variety is understandable and within a reasonable range