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
IHARVARD LAW REVIEW I
 201o by The Harvard Law Review Association
ARTICLE
BUNDLING AND ENTRENCHMENT
Lucian A. Bebchuk and Ehud Kamar
TABLE OF CONTENTS
1.        INTRODUCTION                     .............................................................................................................. 1551
H   .     BUNDLING               AND       CORPORATE                  LAW        ............................................................................. 1555
A. The        Bundling           Problem         ................................................................................................ 1555
i.    Charter         Provisions and               Shareholder            Consent ...................................................... 1556
2.    Bundling ................................................................................................................. 1556
3.    Is Bundling            a  Problem         ? .......................................................................................... 1557
4.    Does Bundling                Occur? ........................................................................................... 1558
B. Testing          the Existence             of   Opportunistic Bundling                       ...................................................... 1559
i.    Staggered          Boards        as   a   Case      Study ......................................................................... 1559
(a) Shareholder               Opposition            to   Staggered          Boards         ................................................ 156o
(b) Em       pirical Evidence                on    Staggered          Boards ...................................................... 1561
2.    M   ergers 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
i.   The      Basic Picture             ................................................................................................... 1571
2.    Controlling           for Size ................................................................................................. 1572
3.    Controlling           for Continuing               M   anagem        ent ............................................................. 1577
4.    Exam       ple .................................................................................................................. 1579
C. Combined               Firms with           New       Charters .......................................................................... 158o
i.   The      Basic Picture             ................................................................................................... 1581
2.    Exam       ples ................................................................................................................. 1582
D. The        Overall Increase               in   Entrenchment ....................................................................... 1584
E. Stock         M   arket Reaction               to  M    erger Proposals .............................................................. 1584
i.   M    ethodology           and     Data ......................................................................................                    1586
2.    Results ................................................................................................................... 1586
IV.      IMPLICATIONS                 ................................................................................................................... 1588
A. Understanding Charters and Shareholder-Approved Measures ................................ 1589
1549

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