With convergence fading in the horizon, the United States and United Kingdom can only turn to the option of amicability. This involves recognizing each system as unique in the best way possible. There should be no ideal or validity debates, each should receive acceptance as having equal validity and value upon adherence to some core principles. The International Accounting Standards (IAS) convergence with the Generally Accepted Accounting Principles (GAAP) of the US is an invaluable lesson that communities do not need to adopt identical policies. They need to cooperate, work together and make their different approaches mutually consistent in attaining the same goals effectively. Nations must work for common welfare bound by an obligation not mere courtesy.
The recent events in the European market lead to a number of contemplated changes in the future. A recent acquisition of Cadburys by US food giant Kraft served as a trigger to the Takeover consideration. The UK has subsequently acknowledged the need to review its takeover rules. The rule aims at a creating balance since it appreciates the existent imbalance and tactical advantage over the target firm. As such, UK takeover panel proposed a number of changes in 2010. Among key proposals made by the panel include “Shut Up or Put Up” regime; regarding the prevalence of virtual bidders. Virtual bids are instances where potential raider firm announces its contemplation of a takeover without making any commitment for such. The results are a vulnerability of the target firm since it does not trigger the normal code process or offers the shareholders any deal. The Put Up or Shut Up notice proposed requires that the raider firm formally give an offer within some limitation of time or walk away from the bid. A conclusion by the panel is giving the raider firm 28 days requiring launch of a formal bid. This study concludes that the panel decision is in pursuance to Dan Fischel and Easterbrook’s proposal that there should be adequate time for preparation. Raiding firms must therefore be ready before making such an announcement.
Armour and Skeel’s analysis on divergence of the takeover regulation is a candidly illuminating scholarly article. It will remain an invaluable asset in the takeover regulation discourse and sustains accuracy on a number of aspects. This critical analysis did however, find gaps and inconsistencies in their answers to the. There exists inconsistency in the factors shaping the British model in comparison to other countries within the Euro zone. However, the fundamental endeavour of this article was to bring to light some aspects that continue escaping the attention of many in the debate. The moral question of legal transplanting is key plus the Euro harmonization endeavours.
Upon conducting critical examination, a summation to the effect that, the divergence and convergence debate remains shallow in informing our future decisions as countries can be made. Policies must henceforth endeavour to create rules that seal loopholes. The US system is full of exploitation offers to mangers and its dependence on courts makes it pro-manager in takeover aspects. The UK system on the other hand is liberal but its shareholder protection policy is not foolproof and can fall prey to manipulation. The critical analysis also allows the conclusion requiring a must variety source of law, this allows borrow knowledge that shapes policy from a various fields to attain balance; this applies to the US system. Policies guiding the regulatory framework must stay alive to regional, contractual and tacit agreements between the nation and other parties. There should be diligence in application of law transplants. UK has to learn that its purported shareholder regulation may become self-defeating. Bottom line is that countries must adopt policies that protect the rights of all and mostly minorities in an equitable manner.