Pills, Polls, and Professors Redux

September 2002 will mark the 20th anniversary of the publication of the memorandum recommending that companies adopt the poison pill, which was adopted in the summer of 1982 to deal with takeover abuses that emerged in the 1970s and had become endemic by the end of the decade. The pill prevents a hostile tender offer from being consummated unless and until the board of directors of the target redeems the pill. Now professor Lucian Bebchuk urges that basic state corporate law to be changed to allow a rider to demand a shareholder referendum whenever a board refuses to redeem a pill. This commentary discusses the development of the law - primarily Delaware law - governing takeovers, and against the background, rebuts Bebchuk's referendum proposal.