May 14, 2006
KKR's new publicly traded private equity fund has the power to make hostile acquisitions. Will it? Not likely. Since the heavy handed regulation of hostile takeovers at the state level, LBO funds found that there best business was in acquiring divisions of public companies, friendly deals. The funds did not want to upset potential customers by mounting hostile deals with a small likelihood of success, so LBO funds became manager's best friends. Hedge funds stepped in but only to acquire minority stakes. The hostile takeover market remains unfunded and neglected. Had the Supreme Court followed up CTS v Dynamics (on a mild form of anti-takeover legislation) with an opinion limiting the more effective forms of state anti-takeover legislation (in the spirit of Edgar v Mite), the economic foundations of American investment would be remarkably different and much healthier. A pity.
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Why does SCOTUS have to fix everything. Isn't Congress in session?
Posted by: Robert Schwartz | May 14, 2006 3:15:27 PM