The board's duties in a takeover

WHEN news of a potential takeover of a listed company breaks, shareholders and the public would usually look first to the board's response to the takeover offer.

Directors owe fiduciary duties to act in the best interests of the company, and this often means having proper regard for the collective interest of its shareholders.

This article outlines the obligations and issues that a target company's board should be aware of in three broad areas: communications, recommendation on takeover offer, and dealing with the offeror.