Market for Corporate Control

The market for corporate control (MFCC) is a market in which one or a set of investors may attempt, and sometimes succeed, in securing management control of a firm from another set of investors through the trading of shares. This may be done, for example, by friendly or hostile takeovers by means of a tender offer, or by mergers or acquisitions negotiated by the board. It is mainly relevant for public listed corporations; shareholders in unlisted corporations often have restrictions on how they may dispose of those shares (such as a veto power by other shareholders).

The MFCC serves as an external corporate governance mechanism by ensuring that management acts to maximize shareholder value through efficient use of a corporation's resources irrespective of whether current shareholders ...