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Changes in ownership and minority protection

Author

Listed:
  • Michele Meoli
  • Stefano Paleari
  • Giovanni Urga

Abstract

Purpose - The purpose of this paper is to report on the study of the two acquisitions of Telecom Italia carried out by Olivetti and Pirelli in the last decade, to evaluate how changes in ownership structure and corporate governance affected minority protection. Design/methodology/approach - The paper presents an analysis of how Olivetti's and Pirelli's takeovers were achieved. Then the authors contrast the two operations with regards to extraction of private benefits and expropriation of minorities' wealth. Findings - Shows that, in the case of Telecom Italia, the implementation of pyramids is connected with the existence of large private benefits, and that the acquisitions resulted in the substantial expropriation of minority shareholders. Research limitations/implications - The analysis is referred to a very unique case. While a lot can be learnt from this approach, generalisations are not trivial. Practical implications - The conclusion is that groups owning several listed companies deserve a special discipline, as many are the policy implications of their presence in financial markets. Originality/value - Proposes anad hocmethodology to consider companies from the top to the bottom of the pyramid chain, and to put in a common framework the non‐simultaneous operations linked by a common strategic goal, namely an acquisition. Further, a set of governance lessons is provided.

Suggested Citation

  • Michele Meoli & Stefano Paleari & Giovanni Urga, 2008. "Changes in ownership and minority protection," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 4(4), pages 323-342, September.
    • Handle: RePEc:eme:ijmfpp:v:4:y:2008:i:4:p:323-342
    DOI: 10.1108/17439130810902813
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    Citations

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    Cited by:

    1. Matteucci, Nicola, 2019. "The EU State aid policy for broadband: An evaluation of the Italian experience with first generation networks," Telecommunications Policy, Elsevier, vol. 43(9).
    2. Hue Hwa Au Yong & Christine Brown & Choy Yeing (Chloe) Ho & Chander Shekhar, 2021. "Rights issues: Retail shareholders and their participation decisions," International Review of Finance, International Review of Finance Ltd., vol. 21(3), pages 917-944, September.
    3. Michele Meoli & Stefano Paleari & Giovanni Urga, 2008. "Controlling shareholders and minority protection: governance lessons from the case of Telecom Italia," Working Papers 0808, Department of Management, Information and Production Engineering, University of Bergamo.
    4. Matteucci, Nicola, 2021. "Procuring NGA infrastructure: The performance of EMAT auctions in Italy," Telecommunications Policy, Elsevier, vol. 45(1).

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