The recent upsurge in the number of take-over bids in British Columbia and in England has revealed several problems of control. These resulted in legislation in British Columbia and a system of voluntary self-control by the institutions involved in England. The object of this paper is to examine the adequacy of control in some important aspects of take-over bids.
As a background to discussion, two bids which disturbed the financial and legal communities in England are described. Some of the problems which were illustrated during the course of these bids are isolated and examined. These include the directors' powers when reacting to a take-over offer, disclosure
of information, equality of treatment for shareholders, the role of financial advisers, and the position of minority shareholders after the completion
of a bid.
It will be seen that two different methods of control operate in British Columbia and in England. In British Columbia, the Securities Act 1967 contains
provisions relevant to take-overs, and is administered by the Securities Commission. In England the situation is more complex. Legislative provisions are contained in the Licensed Dealers (Conduct of Business) Rules, but more significant control is exercised by the Take-over Panel who administer the City Code on Take-overs and Mergers, 1969, a voluntary system of self-control. In both jurisdictions the common law plays an important role.
The strengths and weaknesses of the two systems and their effect on the problems under discussion are noted. The Securities Commission has wide investigatory
and legal powers, but the rules are somewhat inflexible and as the Commission is understaffed it cannot give the attention necessary to problems which may arise. The Take-over Code contains excellent rules, which may be easily adjusted to take account of changes in commercial circumstances, but the Panel suffers from a lack of legal powers. It is discovered that
shareholders in each jurisdiction have common problems of access to information
and enforcement of the rules. In those areas in which the common law is the controlling influence, there is uncertainty as to the rights of shareholders
and the extent to which they may be affected by a resolution of the company in general meeting.
It is suggested that the problems which are revealed by an examination of recent bids can best be approached through a procedure which combines the best and eliminates the worst facets of the present systems in British Columbia and in England. It is therefore recommended that a Take-over Commission be established in each jurisdiction under the Securities Act and the Companies Act respectively, having supervisory, investigatory and legal powers. Flexibility
is maintained by enabling a committee of experts to draw up and continually
revise the rules pertaining to take-overs. / Law, Peter A. Allard School of / Graduate
| Identifer | oai:union.ndltd.org:UBC/oai:circle.library.ubc.ca:2429/34529 |
| Date | January 1970 |
| Creators | Bennett, James Harry |
| Publisher | University of British Columbia |
| Source Sets | University of British Columbia |
| Language | English |
| Detected Language | English |
| Type | Text, Thesis/Dissertation |
| Rights | For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use. |
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