Prof. Jayanth R. Varma’s Financial Markets Blog

A blog on financial markets and their regulation

Irish takeover panel snubs its own government

FT
Alphaville
pointed me to this fascinating ruling
by the Irish Takeover Panel. The panel says that when the government
is a shareholder of the target company, any concessions made by the
acquirer to the government in the area of public policy (lower
consumer prices) is tantamount to giving one shareholder (the
government) more favourable terms than the other shareholders.

I am not a lawyer, but I think this is a complete game changer in
takeover law. Any agreement with the promoters that gives them any
kind of favourable terms even if it is not at all in their capacity as
shareholders seems to be forbidden by this ruling. I blogged about
this kind of issue nearly
three years ago
, but the Irish solution goes beyong anything that I
imagined at that time.

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