February 1, 1990
TO: SEC RULES COMMITTEE NO. 8-90
RE: Pennsylvania Anti-Takeover Legislation
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At the January 11 SEC Rules Committee meeting, we briefly
discussed the proposed anti-takeover legislation that
Pennsylvania is currently considering. As we discussed, the
controversial provisions of the bill are as follows:
a. Any person or group that buys 20% or more of a
company's stock would not be entitled to vote its
shares until granted voting rights by a majority of
the "disinterested" shareholders;
b. All profits from short-term holders who sell their
shares within 18 months after launching a failed
bid for the company, either through a proxy contest
or any other means, will be disgorged; and
c. Directors, in considering an anti-takeover bill,
would be allowed to consider not only the interests
of shareholders, but those of employees, customers,
suppliers and the company's surrounding community.
The bill has already been passed by the Pennsylvania
Senate. Hearings are scheduled to be held before the House
Business and Commerce Committee on February 15 and 16. Although
the Institute will not be involved, individual fund groups may
wish to express their views on this legislation. If you are
interested in doing so, you may contact George Bedwick, Executive
Director of the House Business and Commerce Committee, or Thierry
Malley, Research Analyst for the Committee, at 328 Main Capitol
Building, Harrisburg, Pennsylvania, 17120 (telephone number:
717/787-3055).
Amy B. Rosenblum
Assistant General Counsel