Get tough on takeovers, says Miliband Labour leader Ed Miliband has called for tighter regulation on takeovers to protect the long-term interests of British business.
In an article for the Financial Times, the Labour leader said hostile takeovers of recent years highlighted the “short-termism that blights British enterprise”.
Under plans being considered by Labour, he said investors who buy shares after a company receives a takeover approach would be banned from voting on its sale. He said firms needed a defence “against fund managers chasing the fast buck”.
Under another proposal, a threshold of two-thirds rather than a majority of shareholders would be required before a takeover can succeed.
“Some argue the government should just stay out of the way,” he said. “But the rules which govern the system shape outcomes and it is no accident that too many takeovers are decided on the basis of short-term decision-making by people who never had any interest in the long-term success of the company concerned.
“The rules need to change to help companies take decisions which drive long-term value creation.” Milliband also referred to the “unedifying spectacle” of Cadbury being bought by US firm Kraft in 2010 as investors gambled that the bid would succeed.
Foreign mergers and acquisition investment in the UK totalled £56.8bn and represented 75.6 per cent of all UK M&A activity last year, the highest proportion on record.
