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Corporate Ownership and ControlBritish Business Transformed$
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Brian R. Cheffins

Print publication date: 2008

Print ISBN-13: 9780199236978

Published to Oxford Scholarship Online: January 2009

DOI: 10.1093/acprof:oso/9780199236978.001.0001

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The ‘Sell Side’

The ‘Sell Side’

(p.59) THREE The ‘Sell Side’
Corporate Ownership and Control

Brian R. Cheffins

Oxford University Press

Since the divorce of corporate ownership and control in the UK cannot be explained adequately by reference to theories already advanced, the book carries out a broader enquiry by reference to the ‘sell side’ and the ‘buy side’. This chapter introduces the reader to the sell side, which encompasses the factors that can motivate those owning large blocks of shares to exit or consent to dilution of their stake. These include a desire to benefit from diversification, the lack of a suitable successor, the erosion of profits due to market conditions or tax, a desire to raise capital to finance mergers, buoyant share prices, and erosion of private benefits of control by stock exchange regulation and dividend payments. Also, while blockholders theoretically are well-positioned to secure political favours for their companies, in Britain political advantages blockholders might have had were negligible.

Keywords:   private benefits of control, family business, corporate tax, mergers, self-regulation, dividends, nationalization, political lobbying

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