The Williams Act passed in 1968, established Federal regulation of cash tender offers. Despite the additional constraints on tender offers provided by this federal legislation, thirty-six states have enacted more stringent securities laws since then. This paper briefly investigates the motivation for the state statutes, and then empirically tests the deterrent effects of these laws on tender offer activity for firms headquartered in the states affected. The evidence indicates that the presence of state statutes does deter tender offers, and that the recently enacted SEC tender offer rules will, ceteris paribus, decrease the total number of offers made by 8%.
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Robert H. Smiley (1981) studied this question.