Trends in M&A Deal Terms and Tactics

February 26, 2014

Event| Corporate Transactions

Several Delaware law developments have important implications for companies that plan to do deals this year. Last April, the Delaware legislature passed an amendment to the state’s corporate law code intended to make it easier for buyers to use tender offers to acquire targets, a faster means than the traditional two-step merger. The new law – Delaware General Corporation Law 251(h) – has been used in numerous transactions and should prove even more popular this year. But as cash tender offers are becoming more popular, opportunistic shareholders and law firms are bringing appraisal suits to extract expensive settlements in cash deals, a phenomenon that mirrors the rise in M&A-related fiduciary duty litigation and like that trend increases the cost of dealmaking.

Leo E. Strine, Jr., a Delaware judge highly critical of this trend, was recently appointed as the chief justice of the Delaware Supreme Court after 15 years on the Court of Chancery, the last three as Chancellor. Strine’s ascension – and the selection of his replacement – could affect Delaware case law in ways critical to dealmakers.

Greg Varallo acted as a panelist to address these topics and answer key questions.