M & A

No-Shops & Fiduciary Outs: A Survey of 2012 Public Merger Agreements

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One of the fundamental tenets of corporate law is that boards of directors owe fiduciary duties to the corporation and its stockholders. In the context of a sale of the corporation, these duties may require a board of directors to pursue multiple transactions in an effort to ensure that the corporation’s stockholders receive the highest price reasonably available for their shares. However, once a merger agreement has been signed, the board of directors of the target corporation typically becomes subject to contractual commitments not to pursue alternative transactions and to recommend the transaction to its stockholders. The potential tension between … Read more

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Editor's Tweet: Gibson Dunn releases a survey of 2012 Public Merger Agreements, including an examination of many provisions at the center of negotiations.

Wachtell Lipton Discusses Rulemaking Petition for Modernization of Section 13 Beneficial Ownership Reporting Rules

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NYSE Euronext, the Society of Corporate Secretaries and Governance Professionals and the National Investor Relations Institute have jointly filed a rulemaking petition with the SEC, seeking prompt updating to the reporting rules under Section 13(f) of the Securities Exchange Act of 1934, as well as supporting a more comprehensive study of the beneficial ownership reporting rules under Section 13. The petitioners urge the SEC to shorten the reporting deadline under Rule 13f-1 from 45 days to two business days after the relevant calendar quarter, and also suggests amending Section 13(f) itself to provide for reporting on at least a monthly, … Read more

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Editor's Tweet: Wachtell Discusses a Rulemaking Petition Calling for Modernization of Section 13 Beneficial Ownership Reporting Rules

Seinfeld and Director Compensation: A Decision That Wasn’t About Nothing

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As companies prepare for the upcoming proxy season, the recent Delaware decision in the Seinfeld case offers a cautionary note for boards as they consider director equity and incentive awards and the terms of the plans under which they are issued. In the decision, Vice Chancellor Glasscock, while dismissing a number of other plaintiffs’ claims regarding compensation matters, found that the award to directors of time-vesting restricted stock units under the terms of the company’s stockholder approved equity plan was an interested party transaction and therefore subject to review under the stringent entire fairness standard.

Until Seinfeld, boards of … Read more

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Editor's Tweet: David Fox and Daniel Wolf of Kirkland & Ellis discuss the implications of the recent Delaware decision, Seinfeld.

The ICE Acquisition of NYSE Is a Failure for Europe

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In 2011, the Deutsche Boerse Group launched an offer on the New York Stock Exchange. Everybody expected that the U.S. authorities would object to this foreign acquisition of the most iconic Stock Exchange in the United States, and arguably in the world. Not only did it not happen, but very quickly the U.S. Department of Justice, quite naturally, concluded that there was no antitrust issue. Incidentally, NASDAQ made a desperate attempt to purchase the NYSE for $11.8 billion and the merger of the two largest cash equity exchanges of the United States was stiffly rejected by the U.S. authorities. Even … Read more

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Editor's Tweet: Georges Ugeux, CEO of Galileo Global Advisors, opines on the ICE acquisition of NYSE

“Don’t Ask, Don’t Waive Standstills” Revisited (Rapidly)

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In a second Chancery transcript ruling on the subject in recent weeks, Chancellor Leo E. Strine, Jr. has made clear that Delaware has no per se rule against “Don’t Ask, Don’t Waive” standstill provisions (which prohibit a party subject to a standstill, including a losing bidder in an auction, from requesting a waiver from its standstill obligations). The Chancellor also provided guidance for using such a provision as an “auction gavel” to secure the best price reasonably available to a target company involved in a sales process. Last week’s ruling in In Re Ancestry.com is a welcome clarification that will … Read more

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Editor's Tweet: Wachtell Lipton partners opine on Delaware's two recent rulings on "Don't Ask, Don't Waive" provisions (Ancestry.com and Complete Genomics)

Implications of the Chancery Court’s Recent Rulings on “Don’t Ask, Don’t Waive” Provisions for Auction Processes

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In two recent rulings, the Chancery Court of the State of Delaware has provided important guidance on how so-called “don’t ask, don’t waive” standstill provisions—which are designed to encourage bidders to provide their best offers during an auction—will be viewed in future litigation.  While the Chancery Court has recognized that “don’t ask, don’t waive” provisions can be appropriate and valuable tools for a board, these two rulings will affect the processes boards establish when conducting an auction process.

“Don’t ask, don’t waive” provisions have become increasingly common in M&A standstill agreements as a way of incentivizing competing bidders to put … Read more

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Editor's Tweet: Gibson Dunn’s Eduardo Gallardo and Aaron Holmes opine on Delaware’s recent rulings in Ancestry.com and Complete Genomics.

Re-energizing the IPO Market

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In the policy-oriented paper, “Re-energizing the IPO Market,”which will be published in the 2013 Brookings Press book Restructuring to Speed Economic Recovery, I summarize results from a number of my related co-authored papers and address why IPO volume, and especially small company IPO volume, has been so depressed for more than a decade.

From 1980-2000, an annual average of 310 operating companies went public in the U.S. During 2001-2011, on average only 99 operating companies went public. This decline occurred in spite of the doubling of real gross domestic product (GDP) during this 32-year period. The decline … Read more

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Editor's Tweet: Leading expert on IPOs, Professor Jay Ritter (University of Florida) provides a summary of his work on why IPO volume continues to be so low