Guhan Subramanian

• Harvard University

Since 2011, the United Kingdom has prohibited all deal protections—including termination fees—in mergers and acquisitions (M&A) deals. We examine the effect of this regulatory change on deal volumes, the incidence of competing offers, deal-jumping rates, deal premiums, and completion rates in the United Kingdom relative to the other European Group...

Since 2011, the U.K. has prohibited all deal protections – including termination fees – in M&A deals. Prior to 2011, the U.K. permitted termination fees up to 1% of deal value and there was no prohibition on other protection devices. We examine the effect of this regulatory change on deal volumes, the incidence of competing offers, deal jumping rat...

It is well known that U.S. director elections are largely a formality: incumbents typically nominate themselves, for elections that are almost always uncontested, and are re-elected with virtual certainty. The result, as illustrated by the recent debacle at J.P. Morgan Chase, is what one might expect: directors who are elected not for their qualifi...

Historically, Delaware corporate law provided different standards of judicial review for buyouts by controlling shareholders (also known as “freezeouts”) based on what transactional form was used: deferential business judgment review for freezeouts executed as tender offers, and stringent “entire fairness” review for transactions structured as merg...

In 2007, the Dow Chemical Company and the Kuwait Petroleum Corporation announced plans to launch a multibillion-dollar joint venture. Later known as K-Dow Petrochemicals, it would be one of the largest manufacturers of chemicals and plastics in the world. Analysts widely hailed the planned joint venture as a game-changing deal for both companies. S...

In an Article published in the May 2010 issue of the Business Lawyer, we examined Delaware doctrine and presented new evidence to conclude that the empirical claim that the federal courts relied upon to uphold Delaware’s antitakeover statute against Supremacy Clause challenges is no longer valid, and that the constitutionality of Section 203 is the...

In September 2008, as Lehman Brothers struggled to survive, John Thain, CEO of Merrill Lynch, realized that his bank was also on the brink of failure. Throughout the weekend of September 13-14, 2008, Thain successfully negotiated a deal with Ken Lewis, CEO of Bank of America, for BofA to acquire Merrill. However, throughout the fourth quarter of 20...

Delaware’s antitakeover statute, codified at Section 203 of the Delaware corporate code, is by far the most important antitakeover statute in the United States. When it was enacted in 1988, three bidders challenged its constitutionality under the Commerce Clause and the Supremacy Clause of the U.S. Constitution. All three federal district court dec...

To explore the complexities of acquiring distressed companies in the context of the 2008 financial crisis.

Go-shop provisions have changed the way in which private equity firms execute public-company buyouts. While there has been considerable practitioner commentary on go-shops in the three years since they first appeared, this paper presents the first systematic empirical evidence on this new dealmaking technology. Contrary to the claims of prior comme...

We investigate the effects of governance arrangements on the outcome of hostile takeover bids. We test the hypothesis that, following the development of the poison pill, the outcome of hostile takeover bids significantly depends on whether the target has an "effective" staggered board (ESB), which combines (i) a staggered board preventing sharehold...

This Commentary is part of a dealmaking symposium on the Oracle-PeopleSoft contest from 2003-2004. The facts of the case are described in Millstone & Subramanian (2005). This Commentary examines Oracle's alternatives and PeopleSoft's potential responses in the fall of 2004. I demonstrate that certain defects in the design of PeopleSoft's poison pil...

This case describes Oracle's hostile takeover bid to acquire PeopleSoft, which began with an unsolicited cash tender offer at $16.00 per share in June 2003 and ended with a negotiated deal at $26.50 per share in December 2004. Novel questions of corporate law are raised by the prolonged use of a poison pill against a structurally non-coercive, all-...

Freeze-out transactions, in which a controlling shareholder buys out the minority shareholders, have occurred more frequently since the stock market downturn of 2000 and the Sarbanes-Oxley Act of 2002. While freeze-outs were historically executed as statutory mergers, recent Delaware case law facilitates a new mechanism - freeze-out via tender offe...

This piece provides our amicus curiae brief in the case of American Federation of State, County & Municipal Employees Pension Plan v. American International Group, which is now under consideration by the Second Circuit Court of Appeals. In this case, a shareholder submitted a proposal to amend the company's bylaws to require the company in certain...

At approximately the same time that the Sarbanes-Oxley Act increased the costs associated with being a public company, important Delaware case law created a difference in the standard of judicial review for the two basic methods of freezing out minority shareholders. While a freeze-out executed as a statutory merger is subject to stringent "entire...

Refining and extending the methodology introduced by Daines (2001), I present evidence that small Delaware firms were worth more than small non-Delaware firms during the period 1991--1996 but not afterwards. I also present evidence that larger firms, which comprise 98% of my sample by size, exhibit no Delaware effect for any year during the period...

Among the arguments that have been put forward to support the view that takeover defenses increase shareholder returns when a company becomes a takeover target, the "bargaining power hypothesis" is the most commonly cited argument today. Under this theory, takeover defenses allow the target to extract more in a negotiated acquisition because the bi...

Drawing from practitioner interviews and Gilson & Kraakman's "mechanisms" of market efficiency, I present the argument that the Delaware Supreme Court's decision in Revlon v. MacAndrews & Forbes, Inc. would reduce incentives to search and therefore would reduce overall efficiency in the market for corporate control. I compare this theoretical predi...

We investigate the effects of modern takeover defenses. Following the development of the poison pill, U.S. boards' ability to block an offer that shareholders view as attractive depends on whether the board is protected by an "effective" staggered board (ESB), which prevents shareholders from replacing the full board in a single annual meeting. We...

In recent work, we presented evidence indicating that staggered boards have adverse effects on target shareholders. John Wilcox, the Vice-Chair of Georgeson recently published a critique of our work, urging shareholders to support staggered boards. In this paper we respond to Wilcox's critique and explain why it does not weaken in any way our analy...

This Reply develops and defends our earlier analysis of the powerful antitakeover force of staggered boards. We reply to five responses to our work, by Stephen Bainbridge, Mark Gordon, Patrick McGurn, Leo Strine, and Lynn Stout, which are published in this Symposium. We present new empirical evidence that extends our earlier findings, confirms our...

This paper develops and defends our earlier analysis of the powerful antitakeover force of staggered boards. We reply to five responses to our work, by Stephen Bainbridge, Mark Gordon, Patrick McGurn, Leo Strine, and Lynn Stout, which are to be published in a Stanford Law Review Symposium. We present new empirical evidence that extends our earlier...

Staggered boards, which a majority of public companies now have, provide a powerful antitakeover defense, stronger than is commonly recognized. They provide antitakeover protection both by (i) forcing any hostile bidder, no matter when it emerges, to wait at least one year to gain control of the board, and (ii) requiring such a bidder to win two el...

Commentators have long debated whether competition among states for corporate charters represents a race to the top or a race to the bottom. Race-to-the-top advocates have recently gained ground in this debate on the basis of the general migration to Delaware in the 1990s and empirical evidence suggesting that Delaware incorporation increases share...

Lockups are an increasingly important element of M&A deals in the United States. We present, for the first time, descriptive data on lockup incidence, trends, and their relationship with Delaware case law. Prior commentators have argued that lockups should have little or no impact on allocational efficiency in the market for corporate control. We o...

Displacement chromatography has been shown to be a powerful technique for the simultaneous concentration and purification of biomolecules. Despite its distinct advantages, the displacement mode of chromatography has remained a relatively unknown technique. This is rapidly changing, however, as evidenced by the increasing number of papers on displac...

Displacement chromatography was employed for the preparative-scale separation of peptides and proteins using large particle diameter chromatographic systems. Peptide displacements were successfully scaled-up with respect to particle and column diameter with no adverse effects on product recovery. Protein displacements on 30- and 90-μm agarose-based...

Displacement chromatography was employed for the preparative-scale separation of four-component protein mixtures. The feed components were both purified and concentrated during the separation process. Protein displacement was successfully carried out at elevated flow rates with minimal effect on bioproduct purity resulting in high bioproduct throug...

A mathematical model was developed for the simulation of non-ideal displacement chromatography. The model incorporates finite mass transport to the solid adsorbent by using a linear driving force approximation with a coupled external film and internal pore mass transfer coefficient. Equilibrium adsorption at the fluid—solid interface is described u...

Displacement chromatography was used for the preparative-scale separation of peptides, antibiotics, and proteins. The feed components were both purified and concentrated during the separation processes. The components of a peptide mixture were separated on a reverse-phase analytical column using 2-(2-butoxyethoxy) ethanol as the displacer. The use...