Takeover as an instrument for better corporate governance

Subject of analysis and elaboration in this paper is the market of corporate control and takeover as one of the instruments of internal governance companies. The market for corporate control (external corporate control), together with market products, goods, capital and services is a special feature of the market economy. Overall, the market for corporate control is developed as a fourth type of market where trading with stocks capital takes place on a large scale, and which contributes to the change in control over the companies. Expansion of the market for corporate control is directly related to the internal management of companies, regarding the work and responsibility of the management of companies. Possibility of takeover and establishing control of companies (public takeover offer companies - friendly and hostile takeover), is treated as one of the most powerful instruments for the control of management body. Statutory amendments generally, and especially the acquisition is an important control tool in the allocation of corporate control. Takeover allows changing of inefficient members against their will. Moreover, the very threat of takeover affects the behavior of members of the Board of Directors. Because of this, the effective market for corporate control is a prerequisite for effective management system. Takeover issue is particularly important in many ways. Regarding management body, the acquisition is treated as desirable or undesirable instrument. The latter is determined by whether it is a friendly or a hostile takeover of the company. From the shareholders point of view, offer for public takeover always puts them in a privileged position, which often generates numerous and heterogeneous shareholders fluctuations. This is a case when it’s a question of dispersed shareholder structure, which creates conditions for application of concept of "prisoner’s dilemma" that for management body conditions for preservation of the existing position. Keywords: corporate control, corporate governance, friendly and hostile takeover.