Alternatives to the use of unequal voting rights: a propos the potential threat to their effectiveness as a takeover defense
Independent thesis Advanced level (degree of Magister)Student thesisAlternative title
Alternativ till användandet av röstdifferentierade aktier : apropå hotet till deras effektivitet som uppköpsförsvar (Swedish)
Background: The origin of this study was the negotiations around a EU takeover directive, aimed at making the market for corporate control more open. One of the proposals was to neutralise shares carrying multiple rights in takeover situations when a potential acquirer obtains 75% of the total share capital. For many Swedish ownership groups, this would mean that the system of unequal voting rights, constituting an important defense to their control, would decrease in effectiveness. In the middle of writing this thesis, an EU agreement was finally reached, making the proposal voluntary to adopt. The imminent threat posed to the Swedish system faded, but has though not disappeared since the present rules anew will be brought under inspection in five years.
Purpose: To give examples on potential tactics to adopt if unequal voting rights would risk to become neutralised in takeover situations, these tactics dependent on two different scenarios: (1) Present Swedish ownership structure is considered advantageous for the country and thus to be remained or (2) A more open market for takeovers is desired. Course of action: Interviews have been conducted with parties within Swedish trade and industry, partly in order to assess the value and necessity of the content of this thesis.
Conclusion: The threat of an abolition of the unequal voting rights is not perceived as imminent by parties within Swedish trade and industry and few alternative resistance strategies are suggested. If current Swedish ownership structure is to be remained, the author proposes competition-reducing defenses, if a more open market for takeovers is aimed for, auction-inducing resistance strategies. The choice of how to proceed should depend on how afraid the Swedish Government and Swedish companies are of a change in present ownership structure.
Place, publisher, year, edition, pages
Ekonomiska institutionen , 2004.
Master Thesis in Business Administration (Magisteruppsats från Internationella ekonomprogrammet), 2004:29
Business and economics, EU takeover directive, article 11, hostile takeovers, takeover defense, A- and B-shares, unequal voting rights, ownership structure, Wallenberg, disciplinary mechanism, competition-reducing defense, auction-inducing defense, manager-shareholder alignment, management entrenchment
Economics and Business
IdentifiersURN: urn:nbn:se:liu:diva-2179OAI: oai:DiVA.org:liu-2179DiVA: diva2:19509