MCI-Verizon: Some shareholders are more equal than others

Verizon is buying out MCI’s largest shareholder at a higher price than what it is offering to others. Once again, we see a big flaw in US takeover regulations. Michael Jensen pointed out long ago that the US got its takeover regulations badly wrong in the 1980s. I think they are yet to get it right. All the corporate governance reforms post Enron have not touched this area at all. Interestingly, very little of the takeover regulation in the US comes out of the capital market regulator.

India’s takeover code has a number of deficiencies but in this respect at least it is a lot better.

Posted at 7:34 pm IST on Sun, 10 Apr 2005         permanent link

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