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involved bitter struggles between the suitors and the target companies.The activity created concerns that the mergers stifled competition,controlled markets and pricing, and discouraged innovation. As a result,Congress, state legislatures, and the courts have become involved inregulating the corporate takeover process.Federal RegulationA federal statute known as the Williams Act strictly controls takeoverbids. Under this act, when a suitor offers to acquire more than fivepercent of a target, the suitor must file a statement with the SEC indicatingwhere the money for the takeover is coming from, why the suitoris purchasing the stock, and how much of the target the suitor owns.The goal is to make certain shareholders know the qualifications and theintentions of the suitor. The Williams Act also gives shareholders whohave purchased stock from the suitor 15 business days to change theirminds. This provision takes some of the pressure off shareholders whomay feel compelled to sell their shares to meet the suitor’s deadline.JUDICIAL SCRUTINYThe courts have taken the primary motiveapproach when applying the businessjudgment rule to corporate takeovers. Whatare the problems with this approach?Chapter 30: Corporate Regulation and Expansion 657