This Note will consider the merits of antitakeover legislation with special emphasis on legislative proposals which, like second generation state takeover statutes, would subject tender offers to the approval of shareholders. But discussion and analysis are also applicable to federal proposals which seek to restrict takeovers through regulatory restrictions rather than a shareholder vote, as well as to second generation state takeover statutes. The view taken herein is that all antitakeover legislation, whether at the federal or state level, is neither necessary nor wise. In part II, this Note will examine the proposed antitakeover legislation which prescribes procedures for shareholder approval of tender offers. In part III the propriety of legislation in general will be discussed. In part IV the criteria outlined in part III will be applied to proposed antitakeover legislation. First, the adequacy of the business judgment rule in the corporate control context will be supported. Next, the inability of Congress to define and resolve perceived problems will be considered. Finally, the implications attendant to antitakeover legislation will be discussed. Part V will examine the constitutional validity and effectiveness of second generation state takeover statutes. The pronounced constitutional validity and demonstrated effectiveness of second generation state takeover statutes revitalizes state takeover acts and obviates the need for federal legislation.
Note, Antitakeover Legislation: Not Necessary, Not Wise, 35 Clev. St. L. Rev. 303 (1987)