In 1985, Hanson Trust PLC (defendant) registered a tender offer for SCM Corporation (plaintiff) with the Securities and Exchange. The board of SCM was against the tender offer, and as a result, negotiated with Merrill Lynch to purchase the SCM shares that Hanson was attempting to purchase. Merrill Lynch agreed to purchase the SCM stock at a price higher than that offered by Hanson. Hanson realized that its tender offer was going to fail since Merrill Lynch was offering a higher price for SCM stock, and thus, withdrew its tender offer. After withdrawing the tender offer, Hanson negotiated with five private SCM shareholders for the purchase of their shares. SCM then brought an action to stop Hanson from utilizing this purchasing arrangement, arguing that it still constituted a tender offer. The district court ruled in favor of SCM. Hanson appealed to the Second Circuit Court of Appeals.