At last, investors seem to be awakening to the idea that not all mergers are in their best interests. Given that the current merger mania shows no sign of abating, this epiphany is a mighty good thing.
While most investors greet takeovers with open arms, the fact is that few can be sure that the deals are being struck at the best possible price. Given that the only assessment of a deal's fairness is given by investment banks that are paid when the deal is done, investors are right to wonder whether they could have benefited if their company's negotiators had been tougher.
Now, some investors are doing more than just wondering whether these deals are fair - they are concluding that they are not, and are voting against them. Last month, for example, almost 30 percent of the shareholders in Transkaryotic Therapies, a biotech company, voted against its proposed acquisition by Shire Pharmaceuticals, a British drug company. Only 52.6 percent of the eligible shares were voted in favor of the merger, an unusually small majority.
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