Sep 09, 2015
New York M&A partners Clare O’Brien and Rory O’Halloran and New York M&A associate Gregory Gewirtz wrote an article titled “Changing Its Mind: A Board’s Prerogative?” that was published in the July/August issue of The M&A Lawyer.
In this article, the authors examine the circumstances under which a target’s board of directors can withdraw or qualify its recommendation in favor of a proposed merger. They note that such qualifications or withdrawals can sometimes be made, despite the terms of public company merger agreements that typically contain limitations on the target board’s ability to subsequently withdraw or qualify its recommendation. “Although market practice, as well as Delaware case law, supports the view that some restrictions on a target board’s ability to change its recommendation are consistent with directors’ discharge of their fiduciary duties…,” they say, “the scope of those permissible restrictions will depend on the particular terms (and other relevant facts and circumstances) of each transaction.”