1. Summary of Williams Act
  1.  5% ownership (Section 15)
  2. Register with SEC in 10 days.
  3. Best price (same price to all).
  4. Changes in tender offer (10/20 days).
  5. Minimum offer period (20 days).
  6. Withdrawal rights (7 days/ 60 days).
  7. Two-tiered offers (20 days).
  8. Commencement of the offer (Publication, Advertising, Submittal).
  9. Completion of the offer
2. Purpose of Williams Act
  1. Regulate tender offers.
  2. Provides procedures and disclosure requirements for acquisitions.
  3. Provides shareholders with time to meka informed decisions.
  4. To increase confidence in securities markets
3. Empirical research Regarding Williams Act
  1. Increased average cash premium (tender offer premiums from 32% to 53% in post-1968 period)
  2. Decreased returns to acquirers
  3. Reduced volume and productivity of cash takeovers.
  4. May have prevented many beneficial mergers.
  5. Negative abnormal returns to bidder firms.
  6. Increased abnormal returns to target firms.
4. State Takeover Laws
  1. Time period before the offer can begin.
  2. Requirement that additional information than that under Williams Act be submitted.
  3. Hearings may be required to see if offer meets standards of State's Takeover Bill.
  4. Minimum period that the offer must remain outstanding.
  5. Withdrawal period (7/60 days).
  6. State to Fire: Incorporation, Principal Business Affairs, Principal Assets
5. Impact of State Takeover Laws
  1. Takeover costs increase.
  2. In New Jersey (1988) offer prices fell by 11.5%.
  3. SEC study showed Ohio bids fell by 3.2%.
  4. FTC study showed New York bids fell by 1.00%
  5. Critics said acts protect incompetent management.
  6. Slow process invites competing bids.