LEGISLATION: Delaware Says, Raider, Shoo!

What Liberia and Panama are to the oil tanker, Delaware is to the U.S. corporation: a friendly, light-taxing home port. Some 180,000 corporations are based there, at least on paper, including 45% of those listed on the New York Stock Exchange and 56% of the FORTUNE 500. So when Governor Michael Castle signed new antitakeover legislation last week, the impact reached far beyond Delaware's borders. Among its provisions, the law requires that takeover artists who buy between 15% and 85% of a Delaware-registered company wait three years before selling off assets or merging the target firm with another one. The effect will be to tie up raiders' money and make financing tougher. Delaware felt compelled to adopt the legislation partly because 32 other states already offer similar protection.

Backers of the Delaware law, which passed with only one dissenting vote, say it will not prevent friendly mergers but will ward off hostile attacks whose only purpose is a quick profit. Raiders like T. Boone Pickens contend that the law will merely make mediocre corporate managers more comfortable. Even so, not all corporations are pleased: Black & Decker and Canada's Campeau Corp., two companies currently making multibillion-dollar takeover offers, have already begun to challenge the Delaware law in court.