Minority Shareholders Protection and the Regulation of Control Block Transfers: The Case of the Partial Opportunity Rule

Posted: 6 Sep 1999

See all articles by Alfredo Macchiati

Alfredo Macchiati

CONSOB (Commissione Nazionale per le Società e la Borsa) - Divisione Studi Economici

Giovanni Siciliano

CONSOB (Commissione Nazionale per le Società e la Borsa)

Abstract

The paper analyses the implications in terms of minority shareholder protection of the regulation on control block trades (defined as partial opportunity rule or POR) that requires the buyer (new controlling party) to offer to buy from minority shareholders the same number of shares at the same price of the block transaction. Following Bebchuk (1994), we develop a simple model that explains how, under this regulatory regime, the different motivations behind the acquisition of a firm affect the wealth of the acquired company's shareholders. We test some of the implications of the model with the data on control block sales executed on the Milan Stock Exchange during the period of application of the POR (1992-1996).

JEL Classification: G38, G34

Suggested Citation

Macchiati, Alfredo and Siciliano, Giovanni, Minority Shareholders Protection and the Regulation of Control Block Transfers: The Case of the Partial Opportunity Rule. Available at SSRN: https://ssrn.com/abstract=162574

Alfredo Macchiati

CONSOB (Commissione Nazionale per le Società e la Borsa) - Divisione Studi Economici

Roma, 00198
Italy

Giovanni Siciliano (Contact Author)

CONSOB (Commissione Nazionale per le Società e la Borsa) ( email )

Via G.B. Martini, 3
Roma, 00199
Italy
+39-06-8477544 (Phone)
+39-06-8477612 (Fax)

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