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The Decision to Defend the Company

Learn about the enhanced scrutiny courts apply when evaluating a target board’s decision to implement defensive devices to block a hostile takeover.

Transcript

A board’s decision to defend a company against a hostile takeover involves a complex interplay of legal, strategic, and fiduciary considerations. The target board’s fiduciary duties play a central role in guiding these decisions. The landmark case that provides a framework for evaluating these duties is Unocal Corporation v. Mesa Petroleum Company, 493 A.2d 946 (Del. 1985).

I. Unocal Background

In the Unocal case, Mesa Petroleum Company made a two-tiered front-loaded cash tender offer for 37...

Lessons

    • 1. Welcome to Mergers and Acquisitions
    • Welcome to Mergers and Acquisitions
    2. Introduction to Mergers and Acquisitions
    • M&A Laws
    • Key Players
    • The Decision to Do the Deal
    3. M&A Transaction Structures
    • Statutory Mergers
    • Equity Sales
    • Asset Sales
    • M&A: Tender Offers
    • Tender Offer Rules and Regulations
    • Proxy Contests
    4. The M&A Deal Process
    • Valuation
    • First-Step Agreements
    • Due Diligence
    • Getting the Shareholder Vote
    • The Appraisal Remedy
    5. The Definitive Agreement
    • Price and Consideration
    • Representations and Warranties
    • Covenants, Conditions, and Termination
    6. Securities and Antitrust Considerations
    • Securities as Consideration
    • Securities Registration Exemptions
    • Hart-Scott-Rodino Act
    7. Deciding to Sell and Conflicted Transactions
    • The Decision to Sell
    • Conflicted Transactions
    • Controlling Shareholder Transactions
    8. Defending Against Hostile Takeovers
    • Preemptive Defenses
    • Other Takeover Defenses
    • The Decision to Defend the Company