Takeover bids and insider trading

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Abstract

This paper analyses the law and economics of insider trading in the context of takeover bids, focusing on the European regulatory framework. We distinguish between trading by the bidder, by the target and by classical insiders and first address the issue of precisely when information about potential offers qualifies as inside information. Next, we address the prohibition on selectively sharing inside information with third parties, the prohibition on tipping and the obligation to make public disclosures.
We then analyze the extent to which bidders are permitted to build a stake in the target prior to the offer and the prohibition on target companies and
classical insiders to trade on information regarding a pending offer. Finally, we address reporting obligations in respect of share transactions by those who have access to inside information, showing that these obligations serve multiple purposes including facilitating enforcement of the prohibition on trading on inside information, improving informational efficiency of the stock market and notifying target management of pending takeovers.
Original languageEnglish
Title of host publicationResearch Handbook on Insider Trading
EditorsStephen M. Bainbridge
Place of PublicationLos Angeles
PublisherEdward Elgar
Pages449-468
Number of pages19
ISBN (Print)9781782544814
Publication statusPublished - 2014

Publication series

NameResearch Handbooks in Corporate Law and Governance series

Keywords

  • takeover bids
  • public offers
  • mergers and acquisi
  • stakebuilding
  • insider trading
  • market abuse
  • securities fraud
  • securities regulation
  • Financial Markets

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  • Cite this

    Nelemans, M. (2014). Takeover bids and insider trading. In S. M. Bainbridge (Ed.), Research Handbook on Insider Trading (pp. 449-468). (Research Handbooks in Corporate Law and Governance series). Edward Elgar.