Hostile Bids & Activism

We have applied expertise in finance, governance, and valuation on behalf of targets and bidders, as well as boards of directors, in unsolicited hostile transactions and contested takeovers.

Activist shareholders often trigger litigation in order to force firms to make certain changes. We have analyzed the efficacy of the proposed changes as well as looked into the defense used by boards in response to activism. We work closely with academic experts who have studied the impact of activism on shareholder value and other factors.

Our work in hostile bids has focused on analysis related to:

  • Transaction agreements: We have reviewed issues of enforceability and violation related to nondisclosure, standstill, and material adverse effects agreements, notably in Martin Marietta Materials, Inc. v. Vulcan Materials Company.
  • Nature of the bid: We have assessed, for example, whether a bid is coercive. In Potash Corporation of Saskatchewan v. BHP, our expert assessed market reaction to BHP Billiton’s takeover bid against a sample of comparable hostile bids and found no economic rationale to justify that BHP’s bid was coercive.
  • Valuation: Disagreement over the value of a target – and over the method by which value may be determined – is at the core of many hostile actions, including Air Products & Chemicals, Inc. v. Airgas, Inc.
  • Activism: We analyzed the prevalence of two-tier pills and the extent to which the tiered pills discriminated against activist shareholders in Third Point, LLC v. Ruprecht et al.
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