Takeover Regulation as a Wolf in Sheep's Clothing: Taking Armour & Skeel's Thesis to Continental Europe

Abstract

Aesop was an optimist. In his cautionary fable that inspired the famous admonition about wolves in sheep's clothing, the predator intentionally dons a sheep's fleece in order to sneak up on a lamb. His disguise, it turns out, is so effective that he ends up being mistaken for the real thing and killed by another wolf. According to Aesop, even the most effective fraud can turn against its perpetrator, and justice be done. The results are not always so salutary with other clandestine predators, including legal rules that appear aimed at protecting vulnerable groups, but instead provide valuable tools to be exploited by other, and more powerful, lobbies. The thesis of this Article is that some of the takeover regulations that have proven so successful at protecting minority shareholders in the U.K., and have been incorporated into European takeover regulation, may operate in Continental systems as a deceptive guise that instead ensures protection for entrenched controlling shareholders.