Takeover offers are regulated under the Williams Act Amendments to the Securities and

Exchange Act (SEC) 1934. The act was created to provide governance of securities exchange in
the stock market, all the companies listed on the stock exchange must follow its requirements.
The SEC is regarded as relatively share-holder friendly, however managers are known to
sometimes adopt a hostile approach to takeovers and they adopt defence mechanisms such as
‘poison pills’ or ‘shareholder right plan’ which are designed to ward off a hostile bidder’s stake
particularly if the bidder acquires more than a specified proportion of target stock, usually 10-15
percent

In contrast to the U.S, the UK takeover regulation is shareholder oriented. Managers in the UK
are not permitted to make use of any frustrating defence tactics when there is a takeover bid
without the shareholders permission unlike their U.S counterparts. The Takeover Code only
becomes relevant when there is a bid therefore managers can take advantage of less stringent
“ex ante” regulations well before any takeover bids come to light