The Golden Ratio of Corporate Deal-Making

2015 and 2016 mark the 30th anniversaries of the Delaware Supreme Court’s landmark decisions in Unocal Corp. v. Mesa Petroleum Co.[1] and Revlon, Inc. v. Macandrews & Forbes Holdings, Inc.[2] Those cases and their progeny called for enhanced scrutiny standards to be applied to negotiated change of control transactions as well as to deal protection devices.[3] During the past three decades, however, it has not been smooth sailing in the courts’ application of these standards. In fact, I have previously argued that the Delaware courts have shifted away from both the Unocal and Revlon enhanced scrutiny standards.… Read more

Fleecing the Family Jewels

Crown jewel lock-up options, a deal protection device common during the 1980s mergers and acquisitions boom, are back. My forthcoming paper, Fleecing the Family Jewels,[1] is the first scholarly paper to examine the reemergence of crown jewel lock-ups in M&A transactions and to compare recent lock-ups to those used in the 1980s.

Crown jewel lock-ups became popular in the 1980s, a period which saw a significant number of hostile transactions. Lock-ups were defense du jour – employed to deter hostile bidders. These lock-ups took the form of agreements between a target company and a buyer pursuant to which … Read more