Mandatory Bids Revisited

This article re-examines the role played by the mandatory bid rule in the regulation of takeovers. Recent passage of the European Takeover Directive means that European Member States must implement mandatory bid rules, along British lines, and that the position of the bid rule is cemented into European Law. In particular, this article considers the operation of the rule within the City Code; the justifications traditionally posited in favour of the bid rule; the limitations of those justifications; alternatives to the device that have been employed in other jurisdictions; and some implications of the European Takeover Directive.