Legal Study on the Hostile Takeover Disciplines In Korea, hostile takeovers rarely take the form of a public tender offer, but are in many cases carried out clandestine acquisition of block shares or through an alliance with shareholders acting in concord. With this sequence of hostile takeovers, fair and open disciplines for competition for corporate control have not been well established and a takeover attempt typically leads to litigation the war of attrition. Needless to say, interests of minority shareholders are not protected. In order insure the hostile takeover accomplishes the expected roles of distributing economic resources effectively, improving Corporate Governance and monitoring the management by directors, it is proposed an obligation be imposed on directors to take neutrality principle in a hostile takeover. But once the defence against a takeover attempt is justified by the established hostile takeover disciplines, any unreasonable legal restrictions on defensive measures must be removed And the general shareholders must be protected by a mandatory bid rule and the right to approve defensive measures to be adopted by directors.

Legal Study on the Hostile Takeover Disciplines In Korea, hostile takeovers rarely take the form of a public tender offer, but are in many cases carried out clandestine acquisition of block shares or through an alliance with shareholders acting in concord. With this sequence of hostile takeovers, fair and open disciplines for competition for corporate control have not been well established and a takeover attempt typically leads to litigation the war of attrition. Needless to say, interests of minority shareholders are not protected. In order insure the hostile takeover accomplishes the expected roles of distributing economic resources effectively, improving Corporate Governance and monitoring the management by directors, it is proposed an obligation be imposed on directors to take neutrality principle in a hostile takeover. But once the defence against a takeover attempt is justified by the established hostile takeover disciplines, any unreasonable legal restrictions on defensive measures must be removed And the general shareholders must be protected by a mandatory bid rule and the right to approve defensive measures to be adopted by directors.

hostile takeover, business judgement rule, mandatory bid rule, dual class stock, supermajority voting, poison pill