The United Kingdom’s Panel on Takeovers and Mergers has recently proposed amendments to its Takeover Code that would change the rules regarding hostile offers in order to correct what it called a “tactical advantage” for bidders. The Panel opined that it has “become too easy for ‘hostile’ [bidders] to succeed” and that “short-term” investors (i.e., those investors who buy shares of a target company during the offer period) have unduly influenced the outcome of these hostile offers.
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Barnes & Noble issued a press release announcing preliminary results of shareholder voting at today’s annual meeting. Based on that data, billionaire investor Ronald Burkle lost his bid to place himself and two others on the board of the bookseller. In addition, the shareholder proposal to amend the company’s poison pill, submitted by Mr. Burkle’s investment funds, The Yucaipa Companies, Inc., was rejected. Yucaipa issued a statement saying in part: “As we pointed out to Vice Chancellor Strine in August [referring to Yucaipa’s failed attempt to have the Delaware court invalidate Barnes & Noble’s poison pill], it is nearly impossible for any stockholder to do something Leonard Riggio [Chairman and largest shareholder] doesn’t want to do because of his built-in voting advantage.” Yucaipa pledged to continue pressing for changes at Barnes & Noble and encouraged the board’s independent committee to consider amending the poison pill “to allow other bidders to neutralize Mr. Riggio’s voting bloc.” For further background, see blogs posted at this site on August 16 and 18, 2010.
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"More fortunate than Goliath, eBay leaves this field with only a gash across its forehead; less fortunate than David, Craigslist leaves this field with something less than total victory." - Chancellor William Chandler III
In 2004, eBay acquired a 28 percent stake in privately held Craigslist and became one of only three Craigslist stockholders. Soon after, eBay acquired competing international classified sites and ultimately unveiled a direct U.S. rival in 2007, Kijiji. In response, Craigslist (i) adopted a poison pill to prevent a hostile takeover, (ii) staggered board elections in a manner that made it impossible for eBay to unilaterally appoint a director and (iii) diluted eBay’s ownership percentage by granting additional shares to the majority stockholders (the founders of Craigslist) who, in return, granted a right of first refusal in favor of the company. eBay filed suit challenging all three of these actions in 2008.
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