The market for corporate control is a market-based mechanism, it plays an important role in corporate governance. It will discuss the history of the market for corporate control and relevant takeover regulations in UK. It shows that the attitude of the UK government towards takeover has changed dramatically because of the market for corporate control, and the government may trust and rely on it excessively. However, numerous potential issues of the market for corporate control may be ignored by the British government and shareholders. Firstly, it may not maximize shareholders’ value well in practice. Besides, it also may not optimize resource allocation well in UK. Finally, it may ignore the interests of employees, and they still could not get enough protection. Above problems request the UK government to take more feasible measures to regulate takeovers, and fill the loopholes of the market for corporate control, otherwise, it will hinder the healthy development of British economy. Finally, it suggests the UK government to take measures from three aspects, more eligible bidders, more eligible targets and build a rational takeover process.

This article examines the phenomenon of collusion in corporate acquisition transactions under the framework of the EU mandatory bid rule, focusing on avoidance practices that undermine the application of the highest price paid rule. Through a comparative analysis of landmark cases in France, Italy, and Germany, this study shows how collusive arrangements—often involving side contracts — enable acquirers to offer lower prices to minority shareholders, thereby undermining shareholder protection and distorting the efficiency of the market for corporate control. This article also assesses the adequacy of legal responses at both the EU and national levels in addressing these distortions, arguing that, to effectively restore an “equitable” price, supervisory authorities should take into account any additional benefits granted to the seller of the controlling stake. Compared to valuation methods based on allegedly “objective” criteria, this approach more effectively neutralizes the distorting effects of collusion and strengthens the deterrent function of the mandatory bid rule against inefficient acquisitions.

Purpose This study aims to review the literature on sustainability and corporate governance in the shipping industry, outline suggestions for future research and put forward directions for policy makers. Design/methodology/approach Using a semi-systematic literature review, 94 papers are analyzed. The analysis focuses on sustainability performance and reporting in the shipping industry, the relationship between shipping companies and their external and internal stakeholders and corporate governance and the market for corporate control. Findings The paper documents that a) research on sustainability focuses more on environmental rather than social sustainability in the shipping industry, b) research on sustainability rarely includes corporate governance considerations and vice versa, c) board structure and ownership structure affect the financial performance of shipping companies, d) causality between ESG policies and realized impact is elusive, e) ESG reporting differs substantially across shipping companies and f) the design and implementation of ESG policies must rely on a diverse blend of stakeholder interests. Furthermore, the paper introduces a new model that can serve as navigator in the analysis of ESG in the shipping industry. Originality/value This paper is the first to jointly review corporate governance and sustainability performance and reporting in the shipping industry, thereby highlighting ESG challenges in the context of an industry like shipping which is uniquely global and bears distinct importance for the attainment of sustainability policy objectives.

ABSTRACTA significant portion of a merger's purchase price is allocated to goodwill. Currently, goodwill is not amortized but rather tested annually for impairment. When managers of acquiring firms care about earnings, goodwill's accounting treatment can have large effects on future earnings and may influence how much a manager will bid for a target company. We quantify the effects of goodwill accounting by estimating a structural model of corporate takeovers. Our estimates suggest accrual accounting increases buyout premia by an average of approximately 11 percentage points. If firms needed to amortize goodwill over 10 years, we estimate premia would reduce by 4.9 percentage points and M&A volume would shrink by 4.1% or $67 billion per year. Furthermore, the fraction of private equity acquirers would increase by 6.9 percentage points, shifting control over productive assets to the private and financial sector. Our results suggest the accounting treatment for goodwill has a meaningful effect on the market for corporate control.

ABSTRACTThis article documents the existence of an anchoring bias in the pricing and acceptance of takeover bids in a blockholder regime where the mandatory bid rule applies. Our analysis, performed on the Romanian market for corporate control, shows that the 52‐week high price of the target and the pricing of direct privatisations conducted by the government are strong predictors of both bid premium and outcome. The tender decision depends also on the scope of expropriation perceived by minority shareholders. Our results suggest that stronger capital market discipline is also important for insuring an effective protection of minority shareholders.

Abstract As the European Union advances financial integration, eliminating regulatory and institutional barriers to interstate banking consolidation must become a priority. This is particularly relevant for large, systemically important financial institutions within the euro area, whose performance has ripple effects worldwide. Interstate consolidation offers numerous advantages: greater financial stability through diversification, improved market efficiency, and enhanced global competitiveness of European financial markets. It also supports internal EU goals, such as completing the Banking Union and advancing the Capital Markets Union, as emphasized by reports by Mario Draghi and Enrico Letta. However, regulatory fragmentation, political resistance, and prudential barriers remain significant obstacles. Achieving greater interstate consolidation requires a multi-faceted legislative strategy. Key actions include facilitating the formation and growth of cross-border financial groups by simplifying transaction mechanisms, ensuring an unfettered market for corporate control, and addressing prudential barriers; enhancing group-wide capital and liquidity management through revisions to the Capital Requirements Regulation to allow capital and liquidity waivers for EU subsidiaries; and establishing legal certainty in resolution frameworks by specifying enforceable conditions for intra-group asset transfers and loss-sharing arrangements during resolution. Without these reforms, EU financial fragmentation will persist, weakening Europe’s international competitiveness and leaving its markets vulnerable in an increasingly competitive global environment.

This paper confirms the positive empirical relationship between CAPM-implied target asset betas and bidder announcement returns originally documented by Dessaint et al. (Rev Financ Stud 34(1):1–66, 2021) for U.S. takeover bids. We successfully replicate the main regression results qualitatively for the original and an extended sample period. However, the relationship is statistically insignificant in the European market for corporate control, although it appears to be economically meaningful. Additional tests indicate that bidder announcement returns are only related to target asset betas during merger waves and in horizontal mergers and acquisitions. These findings suggest that the relationship between target asset betas and bidder announcement returns is not driven by a CAPM-induced misvaluation of target firms. Therefore, recommendations to abandon the CAPM for capital budgeting decisions do not seem warranted.

The Market for Corporate Control and Firm Information Environment: Evidence from Five Decades of Data

Abstract Research Summary We study how unique firm technology influences M&A activity. Using a text‐based network approach, we map each firm's position relative to every other firm in technology space to measure the uniqueness of its technology portfolio. Our findings indicate that firms with more unique technology portfolios become prime acquisition targets, particularly for close competitors within the same product market segments. These competitors seek to reduce competition and incorporate unique technologies to strengthen their competitive advantage. Furthermore, firms with unique technology portfolios tend to attract acquirers with closer technological proximity, facilitating the evaluation and integration of these technology assets. Our study underscores unique technology as a critical asset in the market for corporate control and a key driver of M&A transactions. Managerial Summary In today's high‐tech business environment, M&As are pivotal strategies not just for growth and competitiveness but often specifically aimed at acquiring the technology of target firms. By analyzing US public firms, we demonstrate that those with unique technology portfolios attract more acquisition interest, particularly from close product market rivals. These rivals aim to reduce competition and strengthen their existing product business by incorporating the unique technology. Companies with unique technology are also particularly appealing to those within closer technological proximity, easing the evaluation and integration process. Our findings emphasize that possessing a unique technology portfolio is a vital asset in the market for corporate control and a major catalyst for mergers and acquisitions activities.

This article examines how the circular economy (CE) orientation of target firms influences the due diligence undertaken by acquirers in the mergers and acquisitions (M&A) market. Employing ordinary least squares (OLS) regressions on a unique sample of 3,159 European M&A operations, the findings reveal that due diligence activities are significantly faster when acquirers deal with more CE-oriented target firms. This result is consistent with the view that innovative sustainability approaches, such as CE, are used by investors to alleviate information asymmetry concerns in the market for corporate control. Moreover, additional analysis highlights that the association between circular targets and expedited due diligence has strengthened over time, reflecting a recent shift in investors’ understanding of CE practices. Overall, the results underscore the growing importance of CE in the M&A market, offering valuable implications for managers, investors, and policymakers.

Part I of this Note describes a phenomenon of modern corporate activity first identified over fifty years ago as the "separation of ownership and control." This separation gives rise to the need for a governing corporate norm; recognizing the normative aspect of this phenomenon has direct implications for the takeover debate. Part II analyzes the problem of a target board's fiduciary duty as the modern version of the fundamental normative issue of corporate law. It argues that the norm of shareholder wealth maximization, assumed as the starting point by those most in favor of an active and minimally regulated control market, is compelling in its simplicity but misleading in its characterization of the law. A view of fiduciary responsibility that includes consideration for nonshareholder interest, while conceptually more complex and practically more difficult, is more consistent with both the development of the law and the realities of corporate dynamics. Part III analyzes and critiques the hostile takeover for its effect on nonshareholder interests. Although the socioeconomic effects of takeovers are unclear, there appears to be a genuine threat posed to nonshareholders in the form of a wealth transfer to shareholders. This occurs through the uncompensated imposition of high, unbargained-for risk levels on middle management, employees, creditors and local communities. Finally, Part IV argues that the state can play a legitimate role in regulating the market for control to safeguard nonshareholder interests. By restoring the board of directors to a negotiating role in takeovers, business combination statutes, such as those in Delaware," New York, and Wisconsin, can function as a means of protecting or compensating nonshareholders for the imposition of increased levels of risk.

Legal and economic scholars have examined the intersection between corporate governance and taxation; however, recent legal scholarship has generally focused on the interplay between director compensation, management measures in the face of the market for corporate control, and the double taxation of inter-corporate dividends. Other aspects of the relationship between corporate governance and taxation have received limited attention. This article aims to fill this gap in the literature. First, this paper discusses the corporate agency problem and the existing justifications for the corporate tax. Second, this paper argues that the corporate tax can be justified on the ground that it mitigates the corporate agency problem more effectively and with fewer adverse consequences than alternative taxation systems.

Market for Corporate Control: Basic Theory and Possible Routes

With the non-frustration rule ("NFR") and the mandatory bid rule, the Takeover Bid Directive contains two principles which have strongly influenced British takeover law for approximately 50 years. However, the changes of the economic and legal framework of the market for corporate control which have occurred since the adoption of the Directive call into question the legitimacy of both principles. Although the NFR is capable of disciplining board members, it generates misguided incentives and is, at the most, suitable as a disciplining tool of last resort. The idea that in the alternative we would rely on increasing shareholder activism and of trusting the shareholders to discipline the board (also in a company with dispersed ownership) is compelling in principle; however, as active shareholders often seek the shortterm maximisation of returns, misguided incentives cannot be avoided in this context either. In view of these findings, the article explores the ways of structuring NFR optionality. It submits that only the shareholders should be given the option of opting out of the strict NFR -which would continue to serve as the default rule -and that such an opt out should only be possible for a limited period of time. With respect to the mandatory bid rule, its justification is becoming increasingly difficult since the exploitation of the offeree company by the controlling shareholder is more or less excluded by obligations to disclose information, by shareholder activism and by the reform of the Shareholder Rights Directive. In view of the foregoing, this paper argues for reform of the Directive's mandatory bid rule, making it a mere default rule.

The fed information shocks and the market for corporate control: Predictive and causal effects

Abstract This paper examines empirically cross‐fertilization in the productivity growth of banks between a state and its neighbouring and non‐neighbouring states (i) before (i.e. 1971–1977) the interstate multibank holding company (IMBHC) deregulations and (ii) during (i.e. 1982–1995) the IMBHC deregulations, which, through cross‐border bank M&As mainly among neighbouring states, could inject new blood, awaken the market for corporate control and enhance cross‐fertilization in bank performance among neighbouring states. Further, the 1978–1981 period offers a natural experiment to examine Baumol's Contestable Markets Hypothesis (CMH). The legislature of Maine made the first IMBHC deregulatory move in 1978. There was no reciprocity until New York and Alaska made their moves in 1982. Under CMH, Maine's move should inject a competitive spirit and alter bank performance for better across all—neighbouring or non‐neighbouring – banking markets during this period. Theoretically, Kane's regulatory equilibrium framework provides guidance to address these matters and Tiebout's people vote with their feet framework extends and supplements this guidance. Empirically, FDIC's annual banking data, aggregated at the state level, constitute the main input in computing the productivity growth indices for each of the 48 contiguous sample states between 1971 and 1995. Estimations of a novel spatially driven fixed effects model that uses these indices produce empirical results. The empirical model exploits the proximity of one sample state to its neighbouring states while also embracing a set of randomly chosen non‐neighbouring states as a control sample. Results show that cross‐fertilization in bank performance, observed among neighbouring states before the introduction of the IMBHC deregulations during 1971–1977, gets stronger in response to the dynamically evolving IMBHC deregulations during 1982–1995 and that improvements in banks' productivity growth during 1978–1981 support Baumol's CMH. Overall, our results demonstrate the importance and influence of cross‐fertilization, as a matter of proximity of subjects, on banks' performance and suggest promise for future research that embraces the spatial dimension of banking markets and data.

We investigate how net asset values (NAVs) impact equity real estate investment trusts (REITs) in the market for corporate control. REITs trading at discounts to NAV are more likely to be acquired than those trading at premiums to NAV. For each acquisition, there is a public deal premium (the deal value relative to stock price) and a private deal premium (the deal value relative to NAV). REITs trading at discounts to NAV command larger public deal premiums and smaller private deal premiums. Shareholders of targets respond more favorably if the REIT is trading at a discount to NAV. Three-day cumulative abnormal returns (CARs) around acquisition announcements are 11% higher for targeted REITs that are trading below a price-to-NAV ratio of 0.95 than those trading at a price-to-NAV ratio above 1.05. The sale of a REIT trading at a discount to NAV appears to be a productive transaction for both acquirers and targets.

The purpose of the publication is to identify the distinctive features of the behaviour of the merger and acquisition market in the banking sector during two catastrophic events that took place between2020 and 2023. The study includes a literature review, an analysis of previous studies on crises and their impact on the merger and acquisition market, specifically in the banking sector (desk research),as well as an analysis of selected case studies. The article poses the following research question: “Does the merger and acquisition market in the banking sector exhibit specific characteristics during andafter catastrophic events?” In order to answer this question, literature, existing research and statistical data on transactions from 2020–2022 are reviewed. Additionally, two case studies from the Europeanand US markets are analysed. The research provides an affirmative response to the research question, and the conclusions confirming the specificity of the merger and acquisition market in the bankingsector are presented in the article’s summary. The author also recommends further in-depth research on the specifics of the market for corporate control during and after catastrophic events going beyond qualitative analysis.

ABSTRACT Capitalizing on a unique measure of takeover vulnerability, we examine how the takeover market, which is widely regarded as a crucial instrument of external governance, influences environmental, social, and governance (ESG) controversies. This paper is the first to investigate how corporate control markets are influenced by the market for corporate control. The sample consists of unbalanced panel data from 6,236 firm-year observations during 2002–2014. We use Propensity Score Matching (PSM) and Instrumental Variable (IV) analyses to address potential endogeneity, and entropy-balancing approach to address the issue of observable selection. The results show that the disciplinary mechanism associated with the takeover market compels managers to take actions that benefit shareholders, thus avoiding ESG controversies. An increase in takeover susceptibility by one standard deviation resulted in a 10.12% decline in controversial activities. Furthermore, we find that firm profitability drops, and risk increases substantially in response to ESG controversies.

Abstract Research Summary While competition in the market for corporate control determines firms' ability to capture value from acquisitions, there is limited evidence of factors that influence such competition. This study explores whether airline routes intensify competition in this market and affect the target's returns. Targets can become better connected to distant latent acquirers (DLAs), which can increase the targets' bargaining power. Similarly, better connectivity can allow acquirers to reach distant latent targets (DLTs) and therefore increase the acquirers' bargaining power. Examining acquisitions between US public companies during 1980–2018, I find that lower travel time between the target and its DLAs increases the target's returns and the number of competing bids. Instead, the travel time between the acquirer and its DLTs does not play a role. Managerial Summary In corporate acquisitions, the competitive threat posed by potential alternative acquirers of the target generally forces the focal acquirer to offer high returns to the target to gain its control. Indeed, these transactions are often not profitable for acquirers. Yet, we know little about what determines the competitive threat faced by acquirers in the market for corporate control. This study shows that the presence of airline routes that reduce the travel time between the target and its latent acquirers increases the target's returns from the deal and the number of competing bids. The study also tests whether lower travel time between the acquirer and its latent targets gives the acquirer more bargaining power vis‐à‐vis the focal target. However, there is no evidence of this effect.