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123 Harv. L. Rev. 1549 (2009-2010)
Bundling and Entrenchment

handle is hein.journals/hlr123 and id is 1563 raw text is: VOLUME 123 MAY 2010 NUMBER 7 HARVARD LAW REVIEW © 2010 by The Harvard Law Review Association ARTICLE BUNDLING AND ENTRENCHMENT Lucian A. Bebchuk and Ehud Kamar TABLE OF CONTENTS . IN T R O D U CT IO N ..............................................................................................................1551 H . BUNDLING AND CORPORATE LAW .............................................................................1555 A. The Bundling Problem .............................................................................. . . ...1555 r. Charter Provisions and Shareholder Consent............................................1556 2. B undling................................. . .. .......... ... ..... ........ ... .. ......1556 3. Is Bundling a Problem?................ ........ ..................1557 4. D oes B undling O ccur? ........................................................................................1558 B. Testing the Existence of Opportunistic Bundling.......................................................1559 1. Staggered Boards as a Case Study...............................................................1559 (a) Shareholder Opposition to Staggered Boards .............. .. .........156o (b) Empirical Evidence on Staggered Boards....... ... ................1561 2. Mergers as a Case Study ........................................................................................1563 3. The Bundling Prediction.......... .................. .......... .1565 III. EMPIRICAL ANALYSIS ........................................................................................ ...1567 A. The Universe of Transactions Studied ...................................... .......1567 B. Combined Firms that Inherit One Party's Charter...................................................1571 1. The Basic Picture ....................................................................... .. .... ... 1571 2. Controlling for Size...................................................................... ..... ....1572 3. Controlling for Continuing Management ...............................................1577 4. Example..................................................................................................................1579 C. Combined Firms with New Charters...........................................................1580 r. The Basic Picture ...................................... ... ............1581 2. Examples............................................................................1582 D. The Overall Increase in Entrenchment.........................................................1584 E. Stock Market Reaction to Merger Proposals.................... ..........1584 1. M ethodology and D ata...................................................................................... 1586 2. R esults .............................................................................. ....................................1586 IV. IMPLICATIONS ................................................................................................................... 1588 A. Understanding Charters and Shareholder-Approved Measures.......................... 1589 1549

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