Abstract:

In this Article, Mr. Bebchuk proposes two objectives-"undistorted choice" and "equal treatment"-for the legal rules governing corporate acquisitions in general, and corporate takeovers in particular. Mr. Bebchuk argues that undistorted choice is essential to the efficient operation of the market for corporate assets and that equal treatment is suggested by both efficiency and fairness considerations. Current takeover rules, Mr. Bebchuk demonstrat4es, lead to distorted choice and unequal treatment. He therefore puts forward a set of rules that would ensure undistorted choice and equal treatment in corporate takeovers without creating any significant efficiency costs. Although Mr. Bebchuk's analysis focuses on takeovers, he also discusses, in light of the proposed objectives, the legal rules that should govern other methods of corporate acquisition.