Abstract
Whether boards should be allowed to block hostile takeovers is a complicated issue. Based on different value orientations, U.S. and U.K. set contrary regulations. Under U.K. regulations, the board of corporation shall apply the “No frustration” principle when corporation faces a takeover from another entity. While the regulations of the U.S. allow the board to defend hostile takeover by imposing a series of measures under the standards of Unocal and Revlon, current regulations are imperfect in that they are unable to correct the actions of the board timely. Therefore, the needs for improvement to protect shareholders' interests still exist. Aiming to shareholder value maximization, this article proposes a possible solution for improvement and calls on an open environment of power allocation between board and shareholders.
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