Go-Shops Revisited

The Original Study, which examined deals announced in 2006-07, reported that a higher bid emerged during the go-shop period 12.5% of the time (6 instances out of 48 go-shop deals). Using a new database of M&A transactions over the past nine years, we find that the jump rate in the 2010-2018 timeframe was 5.6% (6 out of 108 go-shops), declining to 2.5% (1 out of 40) in the period 2015-2018. The last successful go-shop in our sample occurred approximately three years ago, in January 2016, when II-VI Inc. successfully jumped GaAs Labs’ offer for ANADIGICS, Inc. during a 25-day go-shop period.

As one of us concluded in the Original Study, “go-shop provisions can be a better mousetrap’ in deal structuring – a `win-win’ for both buyer and seller.”  However, over the ensuing decade, a broader set of transactional planners distorted the go-shop technology in ways that achieve their clients’ objectives but no longer satisfy broader corporate law objectives of promoting allocational efficiency in the M&A marketplace. (footnote omitted)

via Harvard, SSRN

Guhan Subramanian, Using the Deal Price for Determining `Fair Value’ in Appraisal Proceedings

This Essay presents new data on appraisal litigation and appraisal outs. I find that appraisal claims have not meaningfully declined in 2016, and that perceived appraisal risk, as measured by the incidence of appraisal outs, has increased since the Dell appraisal in May 2016. After reviewing current Delaware appraisal doctrine, this Essay proposes a synthesizing principle: if the deal process involves an adequate market canvass, meaningful price discovery, and an arms-length negotiation, then there should be a strong presumption that the deal price represents fair value in an appraisal proceeding; but if the deal process does not have these features, deal price should receive no weight. This approach would represent a middle-ground between the competing approaches advanced by twenty-nine law, economics, and finance professors in the DFC Global appraisal, currently on appeal to the Delaware Supreme Court.

わが国の有力説(通説?)に近い意見のように思えます。

via Lowenstein Sandler

デラウェア州一般会社法203条に関するSubramanian教授の講演

このデラウェア州一般会社法203条に関するGuhan Subramanian教授の講演は,Francis G. Pileggiを記念して毎年行われているものです(The 29th Annual Francis G. Pileggi Distinguished Lecture in Law)。この講演のビデオを試聴することができます。

講演は,Delaware Journal of Corporate Lawに掲載されますが,既にドラフトがSSRNにアップロードされています。

DGCL 203の合憲性への疑問と今後の対応について議論しています。

via HLS