Does Shareholder Proxy Access Improve Firm Value? Evidence from the Business Roundtable Challenge

We use the Business Roundtable’s challenge to the SEC’s 2010 proxy access rule as a natural experiment to measure the value of shareholder proxy access. We find that firms that would have been most vulnerable to proxy access, as measured by institutional ownership and activist institutional ownership in particular, lost value on October 4, 2010, when the SEC unexpectedly announced that it would delay implementation of the Rule in response to the Business Roundtable challenge. We also examine intra-day returns and find that the value loss occurred just after the SEC’s announcement on October 4. We find similar results on July 22, 2011, when the D.C. Circuit ruled in favor of the Business Roundtable. These findings are consistent with the view that financial markets placed a positive value on shareholder access, as implemented in the SEC’s 2010 Rule.

The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence and Policy

Staggered boards, which a majority of public companies now have, provide a powerful antitakeover defense, stronger than is commonly recognized. They provide antitakeover protection both by (i) forcing any hostile bidder, no matter when it emerges, to wait at least one year to gain control of the board and (ii) requiring such a bidder to win two elections far apart in time rather than a one-time referendum on its offer. Using a new data set of hostile bids in the five-year period 1996-2000, we find that not a single hostile bid won a ballot box victory against an 'effective' staggered board (ESB). We also find that an ESB nearly doubled the odds of remaining independent for an average target in our data set, from 34% to 61%, halved the odds that a first bidder would be successful, from 34% to 14%, and reduced the odds of a sale to a white knight, from 32% to 25%. Furthermore, we find that the shareholders of targets that remained independent were made worse off compared with accepting the bid and that ESBs did not provide sufficient countervailing benefits in terms of increased premiums to offset the costs of remaining independent. Overall, we estimate that, in the period studied, ESBs reduced the returns of shareholders of hostile bid targets on the order of 8-10%. Finally, we show that most staggered boards were adopted before the developments in takeover doctrine that made ESBs such a potent defense.

Does Shareholder Proxy Access Improve Firm Value? Evidence from the Business Roundtable Challenge

We use the Business Roundtable’s challenge to the SEC’s 2010 proxy access rule as a natural experiment to measure the value of shareholder proxy access. We find that firms that would have been most vulnerable to proxy access, as measured by institutional ownership and activist institutional ownership in particular, lost value on October 4, 2010, when the SEC unexpectedly announced that it would delay implementation of the Rule in response to the Business Roundtable challenge. We also examine intra-day returns and find that the value loss occurred just after the SEC’s announcement on October 4. We find similar results on July 22, 2011, when the D.C. Circuit ruled in favor of the Business Roundtable. These findings are consistent with the view that financial markets placed a positive value on shareholder access, as implemented in the SEC’s 2010 Rule

Is Delaware’s Antitakeover Statute Unconstitutional? Further Analysis and a Reply to Symposium Participants

In an Article published in the May 2010 issue of the Business Lawyer, we examined Delaware doctrine and presented new evidence to conclude that the empirical claim that the federal courts relied upon to uphold Delaware’s antitakeover statute against Supremacy Clause challenges is no longer valid, and that the constitutionality of Section 203 is therefore "up for grabs." In this brief Reply, we respond to five commentaries on our Article, written by prominent corporate law practitioners and academics. Among other points, we re-examine the sample that supported the constitutionality of Section 203 (n=17) to find that not a single one of these bids actually gave bidders a "meaningful opportunity for success" on a hostile basis, as the federal courts held that the Supremacy Clause requires. Taken together, these further findings confirm our view that Section 203 is vulnerable to constitutional attack

Glycerol conversion to 1, 3-Propanediol is enhanced by the expression of a heterologous alcohol dehydrogenase gene in Lactobacillus reuteri

In this work, Lactobacillus reuteri has been metabolically engineered for improving 1, 3-propanediol (1, 3-PD) production by the expression of an Escherichia coli alcohol dehydrogenase, yqhD, that is known to efficiently convert the precursor 3-hydroxypropionaldehyde (3-HPA) to 1, 3-PD. The engineered strain exhibited significantly altered formation rates for the product and other metabolites during the fermentation. An increase in the 1, 3-PD specific productivity of 34% and molar yield by 13% was achieved in the clone, relative to the native strain. A concomitant decrease in the levels of toxic intermediate, 3-HPA, was observed, with the specific productivity levels being 25% lesser than that of the native strain. Interestingly, the recombinant strain exhibited elevated rates of lactate and ethanol formation as well as reduced rate of acetate production, compared to the native strain. The preferential utilization of NADPH by YqhD with a possible decrease in the native 1, 3-PD oxidoreductase (NADH-dependent) activity, could have resulted in the diversion of surplus NADH towards increased lactate and ethanol productivities