October 4, 2006

GM tightens defense against hostile acts

General Motors changed its corporate bylaws Tuesday in a move to thwart hostile actions by large shareholders such as billionaire Kirk Kerkorian. The corporation's board of directors voted to require any shareholder planning a "consent solicitation" to inform the company ahead of time in writing. A consent solicitation allows stockholders to act by written consents to proposed stockholder actions in lieu of voting at an annual meeting. Peter Henning of the Wayne State University Law School explained that GM's move would require a shareholder such as Kerkorian to alert GM management before soliciting other shareholders to obtain their support for a proposed alliance with Renault-Nissan or other action. He said the changes by the GM board are intended to be "an early warning system" for GM of any potential shareholder revolt. "It's a defensive measure. It's a standard anti-takeover, anti-proxy move," Henning said. The story ran in numerous newspapers around the country, including the Akron Beacon Journal, Charlotte Observer, Fort Worth Star Telegram and the Houston Chronicle, to name a few.

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