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Hirte, Heribert

European Company and Financial Law Review

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White Knights and Black Knights – Does the Search for Competitive Bids always Benefit the Shareholders of “Target” Companies? –

Citation Information: European Company and Financial Law Review. Volume 3, Issue 4, Pages 408–425, ISSN (Online) 1613-2556, ISSN (Print) 1613-2548, DOI: https://doi.org/10.1515/ECFR.2006.018, January 2007

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According to the EC Directive on Takeover Bids, defensive measures should be authorised by the general meeting of the target company. The incumbent board can, nonetheless, search for a competing bid, a so-called “white knight”. The rationale underpinning this exception is that competing bids always benefit target's shareholders. In this paper I will tackle this rationale, arguing that even competing bids could generate a pressure to tender on target's shareholders and, therefore, in this case should not be considered as a benefit for them.

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