Mandatory takeover offer — too high a price for the economy to pay?

Abstract

In this article the mandatory takeover provisions of the Securities Regulation Code on Takeovers and Mergers (‘the Code’) are discussed. The origins of the Code are traced to the English City Code on Takeovers and Mergers and the concept of affording protection to minority shareholders in such circumstances as contained in American case law. The application of the Code by the courts is also discussed. Modern theories on company law relating to mergers are traced and analysed. Ultimately the article argues for the repeal of the Code on the grounds that it is an unsatisfactory piece of legislation that has given some difficulty to courts in its interpretation and which is too costly to the South African economy.