Featured Article
Four Boards Go Shopping
An increasing number of unsolicited acquisition agreements have included “go-shop” clauses, allowing target-company directors to actively solicit a better deal for shareholders. Recent deals where this provision was used include the following:
- Triad Hospitals: In March 2007, Triad signed an acquisition agreement with CCMP Capital and GS Capital Partners that provided a 40-day go-shop period. Shortly after the period expired, the original agreement was terminated in favor of an offer from Community Health Systems, which had responded to Triad’s solicitation during the go-shop period.
- Lear Corp.: The auto supplier negotiated a 45-day go-shop period in its February 2007 acquisition agreement with Carl Icahn. Lear’s shareholders turned down Icahn’s offer in July, but no superior bid was received during the go-shop period.
- TXU Corp.: The Texas utility company arranged a 50-day go-shop period in its February 2007 acquisition agreement with private-equity firms KKR and Texas Pacific Group. No superior bids were received during the go-shop period.
- Freescale Semiconductor: In 2006, the chipmaker accepted a buyout offer from a private-equity consortium led by Blackstone Group. But the agreement included a go-shop clause that allowed the company to identify and negotiate with other potential suitors for 50 days after signing the agreement. After the end of the go-shop period and satisfaction of customary closing conditions, Freescale proceeded to close the deal with Blackstone.
“Few deals have been topped by bidders who identified and began negotiations during the go-shop process,” said Dykema M&A Attorney Mark Peters in a Dykema on Demand Podcast. “But more passive shopping mechanisms, such as window-shop clauses, have not led to a high percentage of deals trumped, either. Go-shop clauses might be more successful when strategic buyers, as opposed to financial buyers, are included in the solicitation during the go-shop process.”
For more information, contact Mark Peters at mwpeters@dykema.com.
Back to top | |
Back to:
Dykema on Demand Main Page
Featured Articles :
Making ‘Go-Shop’ Clauses Work in M&A Agreements
Illustrating a growing trend in corporate mergers and acquisitions, corporate directors are checking the market before bringing the deal to shareholders using ‘go-shop’ clauses. Recent M&A Deals with ‘Go-Shop’ clauses
Recently some major mergers have included ‘go-shop’ clauses.
For more information on our Mergers and Acquisitions Practice, contact:
View Professionals |
