Regulatory Responses to the Rise of the Market for Corporate Control in Britain in the 1950s

Abstract

This article examines the evolution of the regulation of takeovers in Britain in the 1950s. Takeovers began in the early 1950s arousing hostility from the authorities which regarded them as undermining economic policy. A series of bids culminating in the struggle for control of the Savoy Hotel in 1953 led to official directives which covertly curtailed the phenomenon by restricting funds for bidders. There was a second wave of bids in the late 1950s following the relaxation of restrictions on bank lending in 1958. The battles for British Aluminium and Watney Mann aroused public interest and put the restriction of takeovers on the political agenda in the run-up to the General Election of 1959. The response was the publication of a set of self-regulatory guidelines by City practitioners, which was ignored. It is argued that this was what the authorities intended since they had come to regard the threat of takeover as a useful discipline on management.