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Hostile takeovers operate as a suitable instrument for disciplining directors leading to better company performance. Bearing in mind, what is the role directors should adopt when the transaction has no board's approval? Implicitly, Colombian Law adopted the board neutrality rule that forbids any measure able to frustrate the Bid. This paper aims to analyze the convenience of adopting this rule and propose guidelines to clarify its scope. [ABSTRACT FROM AUTHOR]

We examine the voluntary disclosure behavior of peer firms of hostile takeover targets. We find that peer firms under control threat use a disclosure strategy that emphasizes bad news: they provide more bad news forecasts, tend to bundle bad news forecasts with earnings announcements, use more negative tone in conference call presentations, and more evenly distribute negative tonal words throughout the presentation to heighten the visibility of bad news. This asymmetric disclosure of bad news is concentrated in firms whose managers have greater incentives to mitigate the control threat—firms with younger CEOs, CEOs with higher total compensation, and firms with weaker anti-takeover provisions. Further tests show that peer firms also manage accruals downward. We contribute to the sparse literature on the impact of corporate control contests on voluntary disclosure by demonstrating that peer firms under control threat emphasize bad news to preempt control threat. JEL Classifications: G14; G32; M4; M41. [ABSTRACT FROM AUTHOR]

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As China's economic influence on the world grows, its system of state capitalism is likewise receiving increasing scrutiny. Behind the state capitalism, China's banking sector, the 'Great Wall Street'--parallel to the 'Wall Street' in the United States-plays a fundamental role in financing and supporting China's economy. Contemporary studies of China's state capitalism, however, focus mainly on Chinese state-owned enterprises, leaving less attention specific to China's state-owned banking sector which adopts a rather different corporate governance practice. In this paper, I conduct a comprehensive and critical review of the bank governance practice in China. Statutorily, Chinese commercial banks generally follow corporate governance best practices, including the requirement of independent directors and board sub-committees and the separation between chairpersons and CEOs. In reality, however, the Chinese party-state manages to dominate Chinese commercial banks by shifting the power center to the executive team, capturing power through its appointment and reward system, and separating the ownership from control. External governance mechanisms, such as market competition, bank regulation and supervision, and hostile takeovers, are inadequate to pose an effective constraint on the Chinese party-state. Under this practice, the Chinese party-state dominates Chinese commercial banks in a less visible manner and thus becomes the 'Hidden Dragon' behind the Great Wall Street. In contrast, private capital, which is also a significant source of investment, only possesses marginal influence on the operational decision of Chinese commercial banks and thus becomes the 'Crouching Tiger' on the Great Wall Street. Based on these observations, this article critically assesses this Crouching-Tiger-Hidden-Dragon model from an agency theory prospective. I identify three special agency problems underlying this model, including the misalignment between the public welfare vis-a-vis party-state's interest, between the party-state's interest vis-avis bank executives' interest, and between the bank executives' interest vis-a-vis the banks' interest. These special agency problems, in turn, account for the current challenges faced by China's banking sector, including the rising risk exposure, the financial constraint of private sectors, and the lack of business innovation. Cite as: Yueh-Ping Yang, Crouching Tigers and Hidden Dragons of the Great Wall Street: Decoding the Corporate Governance of Chinese Commercial Banks, 28 WASH. INT'L L.J. 1 (2019)., I. INTRODUCTION Today, no one would ever underestimate the economic influence of China. After four decades of super growth, China's gross domestic product ('GDP') has skyrocketed to US $12.24 trillion [...]

Copyright of Journal of Economics & Finance is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper examines the dynamics of hostile takeovers (HT's) as a form of corporate warfare. There are a number of compelling reasons for believing this to be an accurate approximation to corporate reality and therefore an appropriate analogy. In circumstances where it is all-too easy for either of the protagonists to act unethically (Berle and Means, The modern corporation and private property, Transaction Publishers, New Brunswick, 1991), there is an evident need for an appropriate template through which to analyse and evaluate the ethical dilemmas that HT's inevitably raise (Armour and Skeel, Georget Law J 95:1727, 2007)-whilst also, where possible, employing its prescriptions as a means of corporate conflict resolution. This paper evaluates just war theory (JWT) as one such template. In seeking a conceptually adaptable framework for analysing, interpreting and articulating antagonistic behaviour during a HT, it became apparent in the course of the research that JWT provided a potentially useful and viable template within which to pursue the above. The research questions centre not necessarily on whether this template could in some way be a substitute for statutory and regulatory constraints on unethical conduct but, rather, whether it might better inform all stakeholders of the importance of ethically informed restraint in the interest of the greater good. [ABSTRACT FROM AUTHOR]

This article presents the dilemma faced by real investors with the emergence of a takeover bid on an existing company. The private benefits that accrue from control mean that defence mechanisms are deployed in the event of a takeover that is considered to be hostile. The article has been written with the sole intention of providing an educational case study for the teaching of Mergers and Acquisitions and Corporate Governance. The character Ricky Spanish is fictional and does not disguise the identity of any real investor. Local press articles and official documents such as company information prospectuses were examined during the preparation of the case study. The facts presented are accurate but the article is not intended to be a work of history. Theory-based analysis permits an approach to the problem of assessed value, which is contrasted with market value. Different scenarios and alternative viewpoints are presented to allow readers to draw their own conclusions. It is observed that the founding family, board members, company executives and press all fail to understand that the company is no longer owned exclusively by its founders. There is a lack of clarity concerning appropriate ways to deal with conflicts of interest between majority and minority shareholders. In markets characterized by decidedly concentrated ownership structures, it is very unlikely that hostile takeovers will occur. The case study identifies the principal benefits and risks faced by investors in a company from a medium income country that cross lists in developed markets.

Hostile takeover attempts are considered a key external governance mechanism aimed at addressing perceived managerial underperformance in a target firm. Studies show that target chief executive officers (CEOs) are usually dismissed shortly after a takeover attempt, regardless of whether the bidder actually completes the acquisition. Yet, little is known about the investment behaviors of target CEOs who actually retain their positions in the wake of an unsuccessful hostile takeover attempt. Engaging with this underexplored governance context, we advance a behaviorally informed model of CEO investment behaviors in response to external governance as a function of the negative performance feedback event of the takeover attempt and the timing of the market's attempt in terms of the stage of the target CEO's tenure. Based on a matched-pair study of 71 failed takeover attempts from 1995 to 2006, we find evidence of a nonlinear relation between target CEO tenure and degree of uncertainty of expected returns in subsequent strategic investments in the wake of a failed hostile takeover attempt. We discuss the implications for research on external governance, behavioral agency, and executives' influences on firm processes and outcomes. [ABSTRACT FROM AUTHOR]

This article summarizes the corporate takeover regime and defensive measures against hostile takeover bids in Slovenia. Although takeover legislation does not differentiate between hostile and friendly takeover, it prescribes the limitation of powers for the management of the target company, with the intention of preventing the use of defensive measures against the hostile takeover. In light of an expected rise in hostile takeover bids in Slovenia, the Corporate Act and the Takeover Act are analysed and accordingly the array of possible preventive measures as well as ad-hoc measures against hostile bids identified and evaluated for their anti-takeover effectiveness. A hostile takeover in Slovenia usually involves a hostile public tender offer at a substantial premium over the prevailing market price for a substantial percentage of the target company’s stock. Managers of target companies use in takeover battles a variety of defensive tactics, which could be controversial because they pose a conflict of interest for management. Duty of neutrality of the management of the target company during takeover process is therefore discussed in connection with the limitation of use of applicable ad hoc defence mechanisms in that period.