Tuesday, May 7, 2013
Takeover defenses in IPO firms
Wilmer Hale has put out its annual M&A report. There are a couple of interesting data points worth looking at. In particular is the table below - Takeover Defenses in IPO Firms. Notice that the basic tendancy to go public with lots of takeover defenses is consistent with findings from Daines and Klausner more than a decade ago (Do IPO Charters Maximize Firm Value?). That much hasn't changed. Indeed, in recent years, there has been a noticeable uptick in tech firms going public with dual-class stock, entrenching entrepreneurs (7% in Wilmer's sample). Also, adoption of exclusive forum provisions in certificates of incorporation appears to be reaching a critical mass - 27% of all IPOs and 44% of all PE backed IPOs. Oh, and don't be fooled by the fact that only 2% of firms go public with poison pills in place. People should stop counting that number. Every board has an implicit pill in place.
It's interesting. Give it a look.