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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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