Takeover Hurdle: A ruling backs state regulation

A ruling backs state regulation

Who rules the corporate takeover game? The U.S. Supreme Court threw considerable uncertainty into that multibillion-dollar question last week with a 6-to-3 ruling that seemed to give a greater say to state legislatures. The Justices affirmed that a 1986 statute restricting hostile takeover offers for companies incorporated in Indiana does not violate either the Williams Act of 1968, a federal law that regulates tender offers, or Article I of the Constitution, which says that only Congress can regulate interstate commerce.

The court's ruling involved a battle between Connecticut's Dynamics Corp. of America (1986 sales: $139 million), a maker of appliances and...

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