Go Shops: A Ticket to Ride Past a Target Board's Revlon Duties?

Page created by Kathleen Pope
Go Shops: A Ticket to Ride Past a Target Board’s
Revlon Duties?*

      This Note discusses and describes the recent use of “go shop” clauses in
corporate merger agreements, particularly agreements involving private-equity
buyers. The Note serves two major functions: (1) to fully describe the charac-
teristics of a go shop by comparing the provision to other deal-protection
measures and providing real-world examples from numerous high-dollar deals
and (2) to highlight the possible legal pitfalls that may arise from using a go
shop in light of recent Delaware jurisprudence.

      In a corporate merger, the parties negotiate the terms of the deal and
eventually sign a merger agreement. The board of directors is charged with the
responsibility of ensuring that the deal is beneficial to shareholders. As such,
the board of the target company—the company being acquired—must test the
market in some way to ensure that the offered price is adequate. Failing to do
this will comprise a breach of the board’s fiduciary duties. Recently, the explo-
sion of private-equity deals—deals made by private funds to purchase
corporations outright—has shortened the fuse on many merger offers, putting
pressure on target boards to make quick decisions. Additionally, the manage-
ments of target companies are often involved on the buyer’s side of the deal and
in bringing these deals to the target board. Thus, in situations such as these,
target boards have sought a mechanism to take the reins of the company away
from management and to acquire the flexibility to sign the agreement while en-
suring the offered price is adequate. Go shops provide this flexibility and have
thus become particularly popular in the context of private-equity deals.
However, the particular legal ramifications of a go shop have yet to be directly
tested in the Delaware courts. This Note seeks to fill that void by fully describ-
ing go shops as they have recently been utilized and forecasting how the
Delaware courts will likely analyze such provisions.

    * I am eternally grateful to my wife, Emily, for her unwavering support, unending patience,
and enduring tolerance of my total lack of direction. I would additionally like to thank my parents,
Suzanne and Robert, for providing a sterling example of character and integrity to serve as my
lodestar. Many, many thanks to my older sister, Suzie, for blazing all the trails; to Professor
Elizabeth Chestney for teaching the unteachable; to Professors William Barnett II and Walter Block
of Loyola University New Orleans for introducing me to Austrian Economics and making
economics part of my everyday understanding; to Professor Joseph Cialone II for introducing me to
the world of go shops and guiding me on this project; and to all the members of the Texas Law
Review Volume 86, particularly the Notes Office, for briefly exploring the world of corporate law
with me.
1124                                   Texas Law Review                               [Vol. 86:1123

     “Every market phenomenon can be traced back to definite choices of
the members of the market society.”
                          —Ludwig von Mises1

I.     Introduction
     The use of the “go shop”2 in corporate transactions3 has recently gained
prominence.4 Increasingly, target corporations’ boards of directors have in-
serted the go shop into merger agreements, ultimately reversing the
conventional wisdom that once a deal was signed the parties agreed to deal
exclusively with each other and refrain from looking for other partners.5
However, if, as von Mises suggests, the phenomenon of including a go shop
in merger agreements is a definite choice by the target board as a member of

3d rev. ed. 1966) (1949).
    2. In a merger agreement between an acquiring corporation and a target corporation, the go
shop is a particular section of the agreement permitting the target corporation to solicit superior bids
in order to obtain a better deal and break the original agreement. See infra notes 56–59 and
accompanying text. The overwhelming majority of go shops have a finite duration lasting between
fifteen and fifty-five days during which the board may solicit bids: the “solicitation period.” See
infra notes 54–56 and accompanying text. Additionally, many other deal protections, particularly
the “break-up fee,” are reduced if a superior bid is obtained during the go shop’s solicitation period.
See infra note 57 and accompanying text. Part II further describes the go shop.
    3. For the purposes of this Note, it is necessary to describe the general process by which a
merger or purchase of a public corporation progresses. In general, an acquiring party makes an
offer to the target corporation’s board of directors to purchase a majority or the entirety of the target
corporation’s stock. Such an offer may be either unsolicited or solicited by the board as part of a
strategy to sell the company. Multiple acquiring parties may make competing offers to the target
board, and the target board decides which offer to accept. The agreement signed by the acquiring
company and target board is a merger agreement, and it contains all the terms and conditions
necessary for the deal to close and the change in control to occur. See DEL. CODE ANN. tit. 8,
§ 251(b) (Supp. 2006) (“The board of directors of each corporation which desires to merge or
consolidate shall adopt a resolution approving an agreement of merger or consolidation and
declaring its advisability.”). However, the ultimate decision to sell the company rests with the
target corporation’s shareholders. See id. § 251(c) (requiring a majority vote of shareholders for the
approval of a merger). Thus, after the merger agreement is signed, the matter of selling the
company must be put to a shareholder vote. Id. To summarize and simplify, the three major steps
of a corporate merger are as follows: (1) an offer is made to the target board, (2) the target board
decides whether to sign the merger agreement, and (3) the signed agreement demonstrating the
proposed merger is put to a vote of the shareholders for approval.
    4. See infra section II(B)(2).
    5. Often, merger agreements contain a “no shop” clause, forbidding a target board from
soliciting new offers. Peter Allan Atkins & Blaine V. Fogg, Auction Law and Practice in
Unsolicited Takeovers (and in Other Corporate Control Transfer Cases), in THE BATTLE FOR
RESPONSIBILITIES 183, 209–10 (Arnold W. Sametz with James L. Bicksler eds., 1991) [hereinafter
THE BATTLE FOR CORPORATE CONTROL]. However, a merger agreement with such a clause is still
subject to an interloping bidder because the agreement must likely contain a “fiduciary out”
provision, allowing the board to accept a subsequently offered higher price. See Omnicare, Inc. v.
NCS Healthcare, Inc., 818 A.2d 914, 936 (Del. 2003) (“To the extent that a [merger] contract, or a
provision thereof, purports to require a board to act or not act in such a fashion as to limit the
exercise of fiduciary duties, it is invalid and unenforceable.” (internal quotation marks omitted)).
The no shop, fiduciary out, and other deal-protection devices are further described in Part II.
2008]                                       Go Shops                                           1125

the market, are the grounds on which that choice is made acceptable in light
of Revlon?6 On the one hand, are target boards merely employing contrac-
tual jargon to provide an end run around their Revlon duties?7 Or are boards
reacting to the growing tide of management-friendly private-equity
purchases8 by seizing control of the corporate-sale process to ensure the
initial bid was a fair price?
      In Delaware, decisions by corporate boards are generally protected by
the “business judgment rule.”9 However, when a change of corporate control
is inevitable, Delaware courts apply an enhanced scrutiny to determine
whether the target board’s decisions and actions were reasonable.10 In
particular, the target board must seek out the best value reasonably available
for its shareholders.11 This standard does not preclude, however, target
boards from signing merger agreements containing terms protecting the
deal.12 Indeed, the Delaware courts distinguish between protections that
“draw bidders into the battle [and] benefit shareholders” and those that “end
an active auction and . . . operate to the shareholders’ detriment.”13
      This Note examines whether a target board’s utilization of a go shop as
linguistically enshrining14 the solicitation of bidders to the battle will per se
satisfy that board’s Revlon duties. It will be shown that a go shop’s imple-
mentation alone will not satisfy the fiduciary duties because of the Delaware
courts’ oft-stated refusal to lay down blanket rules and give credence to such
formalistic arguments. Additionally, a board that implements a go shop and
subsequently fails to utilize the period by soliciting bids in good faith risks
breaching its duty of loyalty based on the recent articulation of that duty in
Stone v. Ritter.15

    6. Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986).
    7. When the sale of a Delaware corporation is inevitable, that corporation’s board of directors is
charged with obtaining the best value reasonably available for its shareholders. See id. at 184 n.16
(“[The board is] charged with the duty of selling the company at the highest price attainable for the
stockholders’ benefit.”).
    8. See infra notes 128–34 and accompanying text.
    9. See infra note 178 and accompanying text.
    10. Revlon, 506 A.2d at 184.
    11. Id.
    12. In re Toys “R” Us, Inc. S’holder Litig., 877 A.2d 975, 1000–01 (Del. Ch. 2005); see also
Barkan v. Amsted Indus., Inc., 567 A.2d 1279, 1286 (Del. 1989) (“[T]here is no single blueprint
that a board must follow to fulfill its [Revlon] duties.”).
    13. Revlon, 506 A.2d at 183; see also Michael G. Hatch, Clearly Defining Preclusive Corporate
Lock-ups: A Bright-Line Test for Lock-up Provisions in Delaware, 75 WASH. L. REV. 1267, 1278
(2000) (describing the Delaware courts’ critical inquiry as distinguishing between those deal
protections that preclude further bidding and those that encourage further bidding).
    14. See Martin Sikora, Merger Pacts Sanction “Go-Shop” Sprees, MERGERS & ACQUISITIONS,
Oct. 2006, at 12, 12 (“[A]n increasing number of deal contracts enshrine the ‘market check’ by
including a ‘go-shop’ clause, which essentially endorses a far-reaching search for the best offer
    15. 911 A.2d 362 (Del. 2006).
1126                                Texas Law Review                            [Vol. 86:1123

      In Part II, the terms in a merger agreement are generally discussed.
First, this Note examines commonly used, preexisting deal protections and
their characteristics. Secondly, the go shop and its benefits are described.
Additionally, illustrations of recent implementations of the go shop are
described. Finally, Part II discusses legal and market factors leading to the
development of the go shop and concludes with a summary of the criticisms
that have been voiced regarding the go shop’s use.
      Part III sets forth the current fiduciary-duty jurisprudence in Delaware
and recent decisions that will affect consideration of the go shop. It also ex-
plains the Supreme Court of Delaware’s current articulation of the duty of
loyalty and good faith in Stone v. Ritter. Then, Chancellor Chandler’s com-
ments regarding the unlikelihood of implementing any blanket rules
regarding merger agreements in Louisiana Municipal Police Employees’
Retirement System v. Crawford 16 are dissected. Finally, the recent cases In
re SS & C Technologies, Inc., Shareholders Litigation17 and In re Netsmart
Technologies, Inc. Shareholders Litigation18 demonstrate the Delaware
courts’ awareness of the possible conflicts of interest related to
management’s involvement with a going-private transaction.
      Part IV analyzes the implications for a board employing a go shop in
light of the recent Delaware jurisprudence. Simply inserting a go shop in the
merger agreement will not satisfy a board’s Revlon duties because the
Delaware courts refuse to adopt blanket rules in such an analysis; arguments
of form will be unpersuasive. Delaware courts are additionally aware of
management’s enthusiasm for going-private transactions, transactions in
which the go shop is most commonly used. A board faced with such a situa-
tion will thus have the duty to actively solicit additional nonmanagement bids
in good faith or risk breaching its newly expanded duty of loyalty.

II.    Terms in the Merger Agreement
     Deal protections are terms in the merger agreement intended to reduce
the risk that an interloper—a bidder not a party to the merger agreement—
will “jump the deal”19 by making an unsolicited bid after the merger agree-
ment is signed.20 In addition to protecting a particular transaction,21 deal

    16. 918 A.2d 1172 (Del. Ch. 2007).
    17. 911 A.2d 816 (Del. Ch. 2006).
    18. 924 A.2d 171 (Del. Ch. 2007).
    19. “Deal jumping” refers to the practice of a party outside the merger agreement bidding to
purchase a target corporation, thus stealing the deal from the original acquirer. See Hatch, supra
note 13, at 1271 (“[C]ompetitors . . . may attempt to jump the deal by making unsolicited bids for
the target corporation.”).
    20. See Brian C. Brantley, Note, Deal Protection or Deal Preclusion? A Business Judgment
Rule Approach to M&A Lockups, 81 TEXAS L. REV. 345, 346 (2002) (using the term “lockup” to
refer to a deal protection and describing the threat of a deal jumper as prompting the use of such
deal protections). See generally Hatch, supra note 13, at 1271–72 (discussing the threat of deal
jumping to the parties of a negotiated merger).
2008]                                        Go Shops                                             1127

protections assure potential acquirers that they will not become a stalking
horse.22 They also guard confidential information of the target company that
may be provided to potential acquirers.23 Traditionally, the deal-protection
tools in a drafter’s tool kit have consisted of “lockups,”24 confidentiality
agreements,25 “force the vote” clauses,26 break-up fees,27 and no shops.28
However, in the spirit of Tim “The Tool Man” Taylor,29 agreement craftsmen
continue to seek the next Binford 610030 of deal protections, as the recent use
of the go shop demonstrates. But how does a go shop differ from its deal-
protection predecessors? And what legal and market factors led to the devel-
opment of the go shop? This Part—after briefly describing the conventional
deal protections—seeks to answer these questions by describing the go
shop’s general characteristics and placing its utilization in the context of cur-
rent legal and market trends.

A. Deal Protections Preexisting the Go Shop
     Merger agreements employ myriad devices to protect the deal, attract
bidders, and guard confidential information.31 Such deal protections include
the lockup, confidentiality agreement, force the vote, break-up fee, and no
shop. This list, however, is by no means exhaustive.

    1. Lockup.—Lockups are a method by which an acquiring company can
obtain the right to purchase or obtain some asset or other valuable considera-
tion in the event that the proposed merger is unsuccessful, due to an

   21. This is a goal that, alone, would be counter to obtaining the best value reasonably available
and thus causing a target board to fail its Revlon duties. See Dennis J. Block, Public Company
M&A: Recent Developments in Corporate Control, Protective Mechanisms and Other Deal
Protection Techniques, in CONTESTS FOR CORPORATE CONTROL 2007, at 7, 89–90 (PLI Corporate
Law & Practice, Course Handbook Series No. B-1584, 2007) (stating that a target board’s
protection of a favored transaction, alone, will not be a compelling justification for the use of a deal-
protection device when Revlon is triggered).
   22. Id. at 89. Deal protections, to a degree, can be justified in light of the target board’s Revlon
duties because such protections attract bidders. See Revlon, Inc. v. MacAndrews & Forbes
Holdings, Inc., 506 A.2d 173, 183 (Del. 1986) (explaining that lockups are valid in circumstances
where they are attractive to potential bidders, thus “draw[ing] bidders into battle”).
   23. Block, supra note 21, at 90.
   24. See infra section II(A)(1).
   25. See infra section II(A)(2).
   26. See infra section II(A)(3).
   27. See infra section II(A)(4).
   28. See infra section II(A)(5).
   29. See Wikipedia, Home Improvement, http://en.wikipedia.org/wiki/Home_Improvement (last
modified Jan. 27, 2008) (describing the leading character on the television series Home
Improvement and his penchant for “more power!”).
   30. See id. (explaining the running gag on the television series Home Improvement as naming
each new and improved power tool the “Binford 6100”).
   31. See Block, supra note 21, at 89–90 (describing the three general goals of deal protections).
1128                                  Texas Law Review                             [Vol. 86:1123

interloping bidder or otherwise.32 Based on the particular property interest to
which the acquiring company obtains a right, three forms of lockup exist: the
“stock lockup,” the “asset lockup,” and the “voting rights lockup.”33 A stock
lockup grants the acquirer the right to purchase a fixed amount of the target
corporation’s shares in the event that the acquisition is terminated,
particularly in the event that a subsequent bidder is successful in jumping the
deal.34 An asset lockup gives the right to purchase certain assets of the target
corporation to the acquirer, generally at the fair market price of those
assets.35 Finally, a voting rights lockup is an agreement in which the target
corporation’s shareholders agree to vote in favor of the merger.36

    2. Confidentiality Agreement.—Confidentiality agreements make the
target corporation’s nonpublic information available so the inquirer may
make an informed bid and conduct due diligence; simultaneously, these
agreements restrict the use to which the acquirer may put such information.37
In general, target boards use confidentiality agreements to condition this

ACQUISITIONS 620 (2006) (describing three main types of lockups that (1) create an option to
purchase some amount of shares of the target, (2) grant the right to purchase certain assets of the
target, and (3) provide a voting agreement with some of the target’s shareholders).
    33. See generally id. at 620–30 (providing examples of these three types of lockups).
    34. Id. at 623. Effectively, a stock lockup provides a one-time payment to the unsuccessful
acquirer from the successful deal jumper equal to the product of (x) the difference between the
successful bid and the initial bid and (y) the amount of shares subject to the option. Id.
    35. Id. at 625. The assets subject to an asset lockup may include the most attractive and
significant assets of the target company. Such a lockup is termed a crown-jewel lockup. Id.; see
also Hatch, supra note 13, at 1274 (describing a “crown jewel” deal protection as an agreement
where the target grants the acquirer the right to purchase a “particularly desirable” asset at a
prearranged price).
    36. LETSOU, supra note 32, at 626. The voting agreement, though an agreement between the
shareholders and the acquiring company, is generally approved in the merger agreement because the
acquirer must obtain the target board’s prior approval or risk waiting the required three years before
acquiring the target. See DEL. CODE ANN. tit. 8, § 203(a)(1) (2001) (requiring an “interested
stockholder” to wait three years before engaging in a business combination with a corporation,
unless the corporation’s board has approved either the business combination or the transaction,
which causes the acquirer to become an interested stockholder); LETSOU, supra note 32, at 630,
629–30 (“[W]ith [the target corporation] as a party to the voting agreements (and with the prior
approval of the voting agreements by [the target’s] directors), the special restrictions . . . of
[Delaware Code] § 203 were effectively waived.”). An interested stockholder is an “owner” of 15%
or more of the outstanding voting shares of the corporation. § 203(c)(5)(i). An owner of stock
includes a party that has acquired the right to vote stock pursuant to an agreement. Id.
§ 203(c)(9)(ii)(B). Thus, an acquirer that seeks a voting rights lockup of 15% or more of the
target’s outstanding shares is an interested stockholder and must seek the target board’s prior
approval to avoid the three-year waiting period. Approving a voting rights lockup in the merger
agreement combined with a force the vote, see infra notes 40–42 and accompanying text, may
violate the target board’s duty to obtain the best value reasonably available due to the effective
result that the board could not prevent shareholder approval of the merger if a superior bid were to
materialize prior to the vote, even if the bidding prior to signing the merger agreement was very
competitive, see, e.g., Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914, 937–38 (Del. 2003).
    37. Heath Price Tarbert, Merger Breakup Fees: A Critical Challenge to Anglo-American
Corporate Law, 34 LAW & POL’Y INT’L BUS. 627, 634 (2003).
2008]                                         Go Shops                                             1129

access on the negotiation with the board rather than approaching the
shareholders directly through a tender offer.38 Such collective bargaining on
behalf of the target’s shareholders is generally regarded as an acceptable
utilization of the board’s representational role vis-à-vis the shareholders.39

    3. Force the Vote.—A force the vote clause does exactly that; the target
board commits to putting the proposed merger to a shareholder vote despite
any subsequent event causing the deal to be less attractive.40 Section 146 of
the Delaware Code expressly permits a target board to make such an
agreement.41 However, the existence of § 146 does not bless all uses of the
force the vote; the target board’s utilization of this agreement is still
subject—in the context of a corporate sale—to obtaining the best value
reasonably available for the stockholders.42

    4. Break-Up Fee.—A break-up fee is a dollar amount that the target
corporation agrees to pay the acquirer in the event of the deal’s “breakup,”
generally resulting from a subsequent superior bid.43 Break-up fees serve the
dual purposes of inhibiting a deal jumper’s ability to top the bid and of com-
pensating the initial acquirer for its investment in the lost transaction.44
Essentially, a break-up fee is a minimum incremental increase for additional
bids to acquire the target. The amount of the break-up fee is generally either

    38. Id.
    39. See Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946, 959 (Del. 1985) (analogizing the
corporate structure of a shareholders’ election of directors to a democracy—the “corporate
democracy”—and describing the directors as the shareholders’ “elected representatives”); Robert B.
Thompson & D. Gordon Smith, Toward a New Theory of the Shareholder Role: “Sacred Space” in
Corporate Takeovers, 80 TEXAS L. REV. 261, 281 (2001) (discussing the Delaware Supreme
Court’s recognition of the directors’ important role as representatives of the shareholders).
    40. Block, supra note 21, at 106. For example, after signing a merger agreement with a
potential acquirer, a deal jumper may arrive on the scene with a more attractive bid. Thus, the
original acquirer’s offer is less attractive. With a force the vote, the board is still required to submit
the less attractive proposed merger to a shareholder vote. Shareholders, however, must be informed
of the subsequent offer before voting on the original agreement. See id. (“[D]irectors must still
provide full disclosure of the information necessary for the shareholders to decide the merger’s
    41. Delaware Code title 8, § 146 provides: “A corporation may agree to submit a matter to a
vote of its stockholders whether or not the board of directors determines at any time subsequent to
approving such matter that such matter is no longer advisable and recommends that the stockholders
reject or vote against the matter.” DEL. CODE ANN. tit. 8, § 146 (Supp. 2006).
    42. See, e.g., Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914, 937 (Del. 2003) (“Taking
action that is otherwise legally possible, however, does not ipso facto comport with the fiduciary
responsibilities of directors in all circumstances.”).
    43. See LETSOU, supra note 32, at 616–18 (illustrating a break-up fee and describing such fees
as a specified sum paid to the acquirer if the agreement is terminated); Hatch, supra note 13, at 1275
(“In the event the target terminates the merger, this provision requires the target to pay the
acquirer . . . .”).
    44. See LETSOU, supra note 32, at 620, 619–20 (describing the purposes of the break-up fee as
“making it more difficult for competing acquirers to top the initial acquirer’s offer” and
compensating the initial acquirer for its initial investment).
1130                                    Texas Law Review                                [Vol. 86:1123

a percentage of the deal value,45 a reimbursement for out-of-pocket expenses
of the acquirer, or some combination of the two.46 Commentators have indi-
cated that a break-up fee of 3% of the deal value is the norm for most merger
agreements;47 however, recent statements by the Delaware Court of Chancery
have called such a bright-line rule into question.48

     5. No Shop.—No shops restrict the ability of a target board to
communicate with third parties about the merger.49 The extent of the
communication limitation varies from the very restrictive “no talk”50 to the
less restrictive “window shop.”51 Generally, no shops contain a fiduciary out
provision, allowing the target board to provide information, negotiate with
third parties, and accept an overriding offer if “doing so is necessary to avoid

    45. For the purposes of this Note, “deal value” is the total price the acquirer will pay for the
target corporation. The total price is the sum of (1) the product of (x) the offered price per share and
(y) the total amount of shares outstanding and (2) the value of the target’s existing debt to be
assumed by the acquirer, unless otherwise indicated that the assumed debt is not included.
    46. See LETSOU, supra note 32, at 619 (discussing termination-fee amounts).
    47. See, e.g., id. (“[Break-up] fees are almost always set at approximately 3 percent of the
transaction value.”); Block, supra note 21, at 111 n.348, 110–11 (reporting the median break-up fee
as 2.6% to 3% and noting that the Delaware Court of Chancery described a 3% break-up fee as
“modest and reasonable” in In re Pennaco Energy, Inc. Shareholders Litigation, 787 A.2d 691, 707
(Del. Ch. 2001)).
    48. See, e.g., In re Netsmart Techs., Inc. S’holders Litig., 924 A.2d 171, 197 (Del. Ch. 2007)
(“The mere fact that a technique was used in different market circumstances by another board and
approved by the court does not mean that it is reasonable in other circumstances that involve very
different market dynamics.”); La. Mun. Police Employees’ Ret. Sys. v. Crawford, 918 A.2d 1171,
1181 n.10 (Del. Ch. 2007) (noting that the inquiry regarding the reasonableness of deal protections
is “by its very nature fact intensive” and that any “attempt to build a bright line rule” is made “upon
treacherous foundations”).
    49. See LETSOU, supra note 32, at 612–13 (describing a no shop as an agreement by which a
target corporation agrees to refrain from discussions, negotiations, or other activities that may result
in an interloping bid); Block, supra note 21, at 91 (explaining a no shop as restricting a
corporation’s ability to encourage, solicit, or negotiate with third parties); Kimberly J. Burgess,
Note, Gaining Perspective: Directors’ Duties in the Context of “No-Shop” and “No-Talk”
Provisions in Merger Agreements, 2001 COLUM. BUS. L. REV. 431, 433, 432–33 (“[No shops] are
designed to restrict the flow of information to alternative bidders about the target’s potential
availability for an alternative transaction . . . .”).
    50. A no talk provision not only bars a target from soliciting or encouraging additional offers, it
also restricts the target’s ability to furnish information to a third party and to negotiate with a third
party. Block, supra note 21, at 91. The Delaware courts have generally been critical of a no talk’s
restrictions on a target board’s ability to obtain the best value reasonably available. See, e.g.,
Paramount Commc’ns, Inc. v. QVC Network Inc., 637 A.2d 34, 48 (Del. 1994) (stating that a strict
no shop—essentially a no talk—is invalid to the extent it is inconsistent with a board’s Revlon
duties, though declining to set a bright-line rule that such no talks are per se invalid by limiting the
court’s decision to the specific facts in the case); see also Block, supra note 21, at 97 (“Delaware
courts have been less receptive to the very restrictive ‘no-talk’ provision.”); Burgess, supra note 49,
at 434 (“[A] no-talk clause . . . is effectively a ‘willful blindness’ that is inconsistent with [the target
board’s] continuing fiduciary obligations . . . .”).
    51. Window shop provisions prohibit a target board from soliciting additional offers, but such
provisions generally contain a fiduciary out permitting consideration of unsolicited offers,
negotiation with third parties, and provision of information to interested third parties. See Block,
supra note 21, at 91 (describing the window shop).
2008]                                       Go Shops                                          1131

violating the board’s fiduciary duties.”52 This traditional and reactive fulfill-
ment of fiduciary duties limits the target board to an implicit and inert
postsigning market check53: the board must rely on unsolicited offerors com-
ing forward in order to ensure that it has achieved the best value reasonably
available for shareholders.

B. The Go Shop
      The no shop’s reactive approach to fiduciary-duty fulfillment has not
been a comfortable one-size-fits-all method for target boards seeking to sat-
isfy Revlon’s requirements. As a result, boards have increasingly included—
subject to an acquirer’s acquiescence—go shops in the merger agreement to
provide a degree of postsigning flexibility in light of an ever-changing legal
and market landscape. This subpart describes the general characteristics of a
go shop and portrays the go shop in action with illustrations of several recent,
high-dollar mergers. Additionally, current trends in the law and the market
are utilized to elucidate the impetus for the go shop’s methodology of proac-
tive fiduciary fulfillment and to highlight potential pitfalls for targets using
the go shop. Finally, current critiques of the go shop are presented to further
flavor the issues inherent in using this particular deal protection. Part IV of
this Note will ultimately address how a Delaware court will likely address
these issues.

    1. Characteristics of the Go Shop.—The go shop’s main entrée is its
provision of a right to the target board to actively solicit additional bids. This
right is generally accompanied by a few side dishes of reduced deal protec-
tions and the possibility of heartburn-inducing restrictions and limitations.
The buffet does not stay open all night, however, and the solicitation right
often closes after a period of time ranging from fifteen to fifty-five days fol-
lowing the agreement’s signing.54 After that time, the go shop reverts to a
more traditional no shop with a fiduciary out;55 though, negotiations with an
additional acquirer that began during the fifteen to fifty-five days are gener-
ally permitted to continue.56 Thus, a go shop bifurcates the time between an

    52. Id. For a discussion of the development and justification of fiduciary outs, see generally
William T. Allen, Understanding Fiduciary Outs: The What and the Why of an Anomalous
Concept, 55 BUS. LAW. 653 (2000).
    53. Netsmart Techs., Inc., 924 A.2d at 197.
    54. Franci J. Blassberg & Stefan P. Stauder, Shop ‘til You Drop (pt. 1), THEDEAL.COM, Dec.
11, 2006, available at FACTIVA, Document No. DLDL000020061211e2cb00008 [hereinafter
Blassberg & Stauder (pt. 1)].
    55. See, e.g., Hosp. Corp. of Am., Agreement and Plan of Merger (Form 8-K), § 7.4(a), (c)
(filed July 24, 2006) [hereinafter Hosp. Corp. of Am. Merger Agreement] (defining the “no-shop
period start date” and providing for a fiduciary out term during the no shop period).
    56. Blassberg & Stauder (pt. 1), supra note 54. It should be noted, however, that disputes do
arise regarding whether a new bid was successfully made during the solicitation period; particularly,
this situation may occur when the interloping bidder makes an initial offer during the solicitation
period and a subsequent increased offer outside the solicitation period is accepted by the target
1132                                   Texas Law Review                               [Vol. 86:1123

agreement’s signing and shareholder approval into a solicitation period and a
no-solicitation period.
     The go shop’s bifurcation of the postsigning, preapproval period permits
parties to tailor the extent of the deal’s protections to the time that has
elapsed since the agreement’s signing; as the merger moves closer to share-
holder approval, the agreement’s defenses increase. A typical example of
adjustments to the deal’s protections in a go shop agreement involves a re-
duced break-up fee if a bid emerges during the solicitation period and an
increased break-up fee for bids after the solicitation period.57 Thus, the mini-
mum increment required to bid on the company is reduced during the
solicitation period—at least in theory—to encourage additional offerors to
make a bid earlier rather than later. This early-bird special58 is not limited to
the break-up fee; rather, it is only limited by the creativity of the negotiating
parties and the target board’s fiduciary duties. Likely, the bifurcation can
and will be applied to other deal protections, such as an asset lockup or force
the vote, to generally increase the agreement’s defenses.59 For example, a
merger agreement with a go shop may provide that the target board must
submit the agreement to shareholder vote—i.e., force the vote—if no addi-
tional offers materialize during the solicitation period. Thus, the expiration
of the go shop’s solicitation period can essentially function as a triggering
event for a myriad of deal protections.
     Go shops, however, are not immune to certain restrictions, and initial
bidders may seek to play a role in the solicitation process. Some go shops
have placed restrictions on the pool of potential buyers a target may solicit.60
Such restrictions include a numerical cap on the number of parties solicited
and a proscription of solicitations made to certain types of buyers—such as
barring the target from soliciting competing bids from private-equity firms.61

board. Merger agreements might address this issue by carefully defining when the interloping
bidder has made a bid during the solicitation period and how long that bidder qualifies to continue
to amend that bid so that the final amount does not fall outside the benefits of the solicitation period.
    57. See, e.g., Triad Hosps., Inc., Agreement and Plan of Merger (Form 8-K), § 1.1 (filed Feb. 4,
2007) [hereinafter Triad Hosps., Inc. Merger Agreement] (providing for a break-up fee—defined as
the “Go Shop Termination Fee”—of $20 million if a bid emerges during the solicitation period and
$120 million if a bid emerges after the solicitation period—defined as the “Termination Fee”).
    58. See Francesco Guerrera, “Early Bird” Factor Is Thwarting “Go Shop” Clause, FIN. TIMES
(London), Nov. 5, 2006, at 20 (describing the first bidder’s common success in ultimately acquiring
the company as the “early bird” factor).
    59. The target board will still be required to walk a fine line between protections that encourage
bidders to join the battle and protections that preclude bidders. See Revlon, Inc. v. MacAndrews &
Forbes Holdings, Inc., 506 A.2d 173, 183 (Del. 1986) (stating that lockups that draw bidders benefit
shareholders, while lockups that foreclose further bidding harm shareholders). However, increased
protections after the solicitation period will arguably make the deal more valuable to the initial
bidder, thus tacking towards the best value reasonably available. Still, the length of the solicitation
period will factor into the equation, and an agreement with a relatively short solicitation period
combined with preclusively large post-solicitation-period protections will likely smash against the
rocks of Revlon’s requirements.
    60. Blassberg & Stauder (pt. 1), supra note 54.
    61. Id.
2008]                                       Go Shops                                            1133

In addition to these restrictions, initial bidders may insist upon matching or
topping rights in order to reserve the ability to cut back into the deal’s dance
after an interloping bidder’s interjection.62 Such rights save the last dance for
the initial bidder, if it so chooses.63 A target may also be required to keep the
initial bidder abreast of information regarding additional bids; this require-
ment limits the target board’s negotiation leverage in seeking a topping bid
from the initial bidder.64 Notably, at the time of this Note’s writing, the only
go shop successful in attracting an additional bidder during the solicitation
period lacked all of these restrictions.65
      Both target boards and acquirers obtain benefits from a go shop. The
target board benefits from the ability to proactively fulfill its fiduciary duties;
notably, this ability allows the board to take the reins from management that
has decided to steer the company towards a sale with a particular purchaser
while neglecting to so inform the board.66 Additionally, the board can effi-
ciently run on parallel tracks, auctioning the company to additional bidders
and working with the initial buyer towards closing.67 Finally, the target
board is generally on the hook for a lower break-up fee for any better deal
found during the solicitation period.68
      An acquirer benefits from a go shop, as well. Because of the efficiency
afforded the target board, a go shop helps the acquirer close the deal more
quickly.69 Additionally, the use of a go shop generally dissuades a target

    62. Id.; see also Doug Warner & Christopher Machera, Surveying the Go-Private Landscape,
THEDEAL.COM,          Feb.     26,     2007,     available      at    FACTIVA,      Document       No.
DLDL000020070226e32q00014 (reporting that 78% of private-equity deals contain matching
    63. See, e.g., Lear Corp., Agreement and Plan of Merger (Form 8-K/A), § 5.2(e)(ii) (filed Feb.
9, 2007) [hereinafter Lear Corp. Merger Agreement] (providing topping rights to the bidder, Icahn
Partners LP); Hosp. Corp. of Am. Merger Agreement, supra note 55, § 7.4(d)(ii) (providing
matching rights to Bain Capital LLC).
    64. See Blassberg & Stauder (pt. 1), supra note 54 (stating that nearly all of the agreements
reviewed by the authors provided the right to the initial bidder to be informed of the target’s receipt
of alternative bids).
    65. See Triad Hosps., Inc. Merger Agreement, supra note 57, § 7.4 (failing to require the target
to immediately disclose competing bidders’ identities to the initial bidder or to consider a matching
or topping bid by the initial bidder); Theo Francis, Community Health to Acquire Rival Triad,
WALL ST. J., Mar. 20, 2007, at A3 (reporting the success of Community Health Systems Inc.’s bid
to acquire Triad Hospitals, Inc. over the initial, private-equity bidder).
    66. See infra notes 135–42 and accompanying text.
    67. Franci J. Blassberg & Stefan P. Stauder, Shop till You Drop (pt. 2), THEDEAL.COM, Dec.
12, 2006, available at FACTIVA, Document No. DLDL000020061212e2cc0000a [hereinafter
Blassberg & Stauder (pt. 2)].
    68. This is assuming, of course, the break-up fee is reduced during the solicitation period.
Some break-up fees are not bifurcated in this way. See, e.g., Maytag Corp., Agreement and Plan of
Merger (Form 8-K), § 6.07(b) (filed May 23, 2005) [hereinafter Maytag Corp. Merger Agreement]
(providing a break-up fee of $40 million regardless of whether the successful second bid was during
the solicitation period or after such period).
    69. Jared A. Favole, Private-Equity Bidders Allowing Target Cos to “Go Shop,” DOW JONES
NEWSWIRES,         Sept.     20,     2006,      available     at     FACTIVA,      Document        No.
1134                                Texas Law Review                            [Vol. 86:1123

board from demanding a full-blown presigning auction; thus, the unpredict-
ability and increased cost of such an auction are avoided when an acquirer
agrees to a go shop.70 Finally, the go shop ensures the acquirer receives at
least some compensation for its expenses incurred in making the initial bid.71
The acquirer receives nothing for its troubles if it loses a presigning auction,
but the acquirer that signs an agreement with a go shop will receive a conso-
lation prize if its offer is outbid.72 Because of these myriad benefits, many
recent transactions have included a go shop in the merger agreement, as dis-
cussed in the following section.

    2. Deals Using the Go Shop.—The go shop has been illustrated in
several recent billion-dollar deals. Such deals include the proposed sale of
Maytag Corp. (Maytag) to Ripplewood Holdings LLC (Ripplewood), the sale
of Freescale Semiconductor, Inc. (Freescale) to The Blackstone Group
(Blackstone) and other private-equity firms, the sale of Hospital Corp. of
America (HCA) to Bain Capital LLC (Bain Capital) and a consortium of
private-equity firms, the sale of Lear Corp. (Lear) to Carl Icahn’s American
Real Estate Partners LP (Icahn), the proposed sale of TXU Corp. (TXU) to a
combination of private-equity firms, including Texas Pacific Group (Texas
Pacific) and Kohlberg Kravis Roberts & Co. (KKR), and the proposed sale of
Triad Hospitals, Inc. (Triad) to a group of private-equity purchasers,
including CCMP Capital Advisors, LLC (CCMP) and Goldman Sachs & Co.
(Goldman Sachs). These outright sales of large public companies have
brought the go shop into prominence and made it the topic of much debate.
     On August 22, 2005, Ripplewood’s attempt to purchase Maytag was
thwarted by an interloping bid from Whirlpool Corp. (Whirlpool), which was
ultimately successful at merging the two appliance manufacturers.73
Ripplewood initially offered $1.125 billion (not including the assumption of
$975 million in debt) to acquire Maytag, or a cash offer for $14 per share.74
The agreement included a go shop allowing Maytag’s board to solicit addi-
tional offers for thirty days.75 However, the break-up fee was $40 million
(about 3.5% of deal value) regardless of when a competing bid was

FF00000020060920e29k0002b (noting that the go shop approach appeals to private-equity sponsors
because it is often “faster”).
   70. See Guerrera, supra note 58 (stating that go shops were seen as a method for private-equity
buyers to avoid crowded and costly auctions for targets).
   71. See Favole, supra note 69 (noting that the go shop approach appeals to private-equity
sponsors because it “assure[s] them that they will get something”).
   72. See Blassberg & Stauder (pt. 2), supra note 67 (“[A] lost presigning auction leaves a
prospective buyer empty-handed. Losing a transaction as a result of a post-signing auction . . .
leaves the initial purchaser with a consolation prize . . . .”).
   73. Favole, supra note 69.
   74. Press Release, Maytag Corp., Maytag Corporation to Be Acquired by Ripplewood for $14
per Share in Cash (May 19, 2005), available at http://www.sec.gov/Archives/edgar/data/63541/000
   75. Maytag Corp. Merger Agreement, supra note 68, § 5.02.
2008]                                      Go Shops                                         1135

received.76 Additionally, Maytag was required to inform Ripplewood if a
competing offer was made.77 During the solicitation period, Maytag con-
tacted more than 100 potential buyers.78 After the solicitation period
expired—at which point the go shop converted to a no shop with a fiduciary
out79—Whirlpool provided a superior offer of $1.7 billion (not including
$975 million in assumed debt) in cash and stock to purchase Maytag.80 Al-
though the competing bid was not made during the solicitation period, the go
shop “was instrumental in a bidding contest that led to the $1.7 billion
merger of . . . Whirlpool Corp. and Maytag Corp., which was not the original
     Blackstone led a consortium of private-equity firms—including The
Carlyle Group (Carlyle), Permira Funds, and Texas Pacific—in a “club
deal”82 to purchase Freescale on September 16, 2006.83 Prior to signing the
merger agreement, Blackstone’s club successfully outbid another club led by
KKR with an offer to purchase Freescale for $17.6 billion.84 However,
Blackstone’s offer was not higher than KKR’s.85 Freescale’s board
considered KKR’s bid less attractive because KKR did not have financing
fully arranged, and KKR’s recent acquisition of another semiconductor
manufacturer implicated regulatory concerns.86 Blackstone’s merger agree-
ment contained a go shop permitting a fifty-day solicitation period.87 The
break-up fee, however, was only reduced if a competing offer was received
within eleven days of signing.88 The full break-up fee was on the smaller
side, requiring payment of $300 million (1.7%) in the event the deal was

    76. Id. § 6.07(b).
    77. Id. § 5.02(e).
    78. Andrew Ross Sorkin, Looking for More Money, After Reaching a Deal, N.Y. TIMES, Mar.
26, 2006, § 3, at 4.
    79. Maytag Corp. Merger Agreement, supra note 68, § 5.02(b)–(d).
    80. Press Release, Whirlpool Corp. & Maytag Corp., Whirlpool Corporation and Maytag
Corporation Sign Definitive Merger Agreement (Aug. 22, 2005), available at http://www.sec.gov/
    81. Sikora, supra note 14, at 13 (emphasis omitted).
    82. A club deal is a transaction in which multiple private-equity firms combine to purchase the
target. See Steve Rosenbush, Private Equity Slugfest, BUS. WK., Feb. 13, 2007, http://www.busi
nessweek.com/print/bwdaily/dnflash/content/feb2007/db20070212_956645.htm (describing club
deals as deals “in which several private equity firms work as partners to make a big acquisition”).
    83. Press Release, Freescale Semiconductor, Inc., Freescale Semiconductor Reaches Agreement
with Private Equity Consortium in $17.6 Billion Transaction (Sept. 15, 2006), available at
    84. Andrew Ross Sorkin & Laurie J. Flynn, Blackstone Alliance to Buy Chip Maker for $17.6
Billion, N.Y. TIMES, Sept. 16, 2006, at C3.
    85. Andrew Ross Sorkin & Barnaby J. Feder, Freescale Considers Rival Bids, N.Y. TIMES,
Sept. 12, 2006, at C1.
    86. Sorkin & Flynn, supra note 84.
    87. Freescale Semiconductor, Inc., Agreement and Plan of Merger (Form 8-K/A), § 6.5(a) (filed
Sept. 15, 2006).
    88. Id. § 1.1.
1136                               Texas Law Review                          [Vol. 86:1123

terminated.89 Additionally, Freescale was required to inform Blackstone of
all material terms in any competing offer the target received.90 Ultimately,
no competing bids emerged, and the Blackstone-led group successfully pur-
chased Freescale.
      Another private-equity club—this time with Bain Capital, KKR, and
Merrill Lynch Global Private Equity (Merrill Lynch) as members—perfected
a multibillion-dollar acquisition while including a go shop in the merger
agreement. Bain Capital and the rest of the club purchased HCA, a health-
care-services company, for $21.3 billion (not including $11.7 billion in as-
sumed debt).91 According to the agreement’s terms, a competing offer
received during the fifty-day solicitation period92 would be subject to a re-
duced $300-million (1.4%) break-up fee,93 rather than the full $500-million
(2.3%) charge.94 The attractiveness of the reduced break-up fee, however,
may have been offset by the restrictions placed on the go shop: Bain Capital
retained the right to top any competing bid HCA received.95 Further, within
twenty-four hours of the solicitation period’s end, HCA was required to in-
form Bain Capital of all the material terms of any offer received.96 Indeed,
these restrictions, as well as other characteristics of the agreement, prompted
the filing of a shareholder class action against HCA in the Delaware Court of
Chancery.97 Chancellor Chandler granted a stay of the proceeding in favor of
a parallel Tennessee action and denied a motion to reargue the claim.98
      Carl Icahn incorporated a forty-five-day solicitation period with the go
shop in his merger agreement to acquire Lear.99 No bids emerged during
those forty-five days to challenge Icahn’s offer of $2.8 billion (not including
$2.5 billion in assumed debt) to purchase the auto-parts manufacturer.100 The
break-up fee during the solicitation period in Icahn’s merger agreement was
$73.5 million (2.6%) plus reimbursement of up to $6 million in expenses re-
lated to making the offer.101 Outside of the solicitation period, the break-up

   89. See id. (defining the full break-up fee as the “Company Termination Fee”).
   90. Id. § 6.5(c).
   91. Andrew Ross Sorkin, Big Private Hospital Chain May Be Close to Record Sale, N.Y.
TIMES, July 24, 2006, at A15.
   92. Hosp. Corp. of Am. Merger Agreement, supra note 55, § 7.4(a), (c).
   93. See id. § 1.1 (defining the reduced break-up fee as the “Go Shop Termination Fee”).
   94. See id. (labeling the full break-up fee the “Termination Fee”).
   95. Id. § 7.4(d)(ii).
   96. Id. § 7.4(c).
   97. Consolidated Amended Complaint at 11–12, In re HCA Inc. S’holders Litig., No. 2307-N,
2006 Del. Ch. LEXIS 197 (Del. Ch. Nov. 20, 2006) (No. 2307-N).
   98. In re HCA Inc. S’holders Litig., No. 2307-N, 2006 Del. Ch. LEXIS 197, at *1–2 (Del. Ch.
Nov. 20, 2006).
   99. Lear Corp. Merger Agreement, supra note 63, §§ 5.2, 8.11(aa).
   100. Terry Kosdrosky, UPDATE: Lear Counteroffer Period Ends, but Talks Continue, DOW
JONES NEWSWIRES, Mar. 27, 2007, available at FACTIVA, Document No.
   101. Lear Corp. Merger Agreement, supra note 63, § 7.4(c).
2008]                                     Go Shops                                         1137

fee was $85.2 million (3.4%) with up to $15 million in expense
reimbursements.102 Further, as with HCA’s merger-agreement restrictions,
restrictions in Icahn’s merger agreement provided a topping right103 and a
right to receive a copy of any alternative offers Lear received.104
      At the time the deal was announced, KKR and Texas Pacific’s proposed
acquisition of TXU for $32 billion (not including $13 billion in assumed
debt) was the largest buyout of its kind in history.105 The break-up fee was
again staggered based on the fifty-day solicitation period,106 requiring pay-
ment of $375 million (1.2%) for a competing offer received during the period
and $1 billion (3.1%) for an offer received after the period.107 This deal also
required the target to disclose the material terms of any alternative bid
received108 and granted a topping right to the acquirer.109
      In the only deal to date in which an alternative bidder stepped forward
during a go shop’s solicitation period, Community Health Systems, Inc.
(CHS) crashed CCMP and Goldman Sachs’s proposed acquisition of
Triad.110 CCMP and Goldman Sachs proposed to purchase Triad for $4.7
billion (not including $1.7 billion of assumed debt).111 The original merger
agreement contained a go shop with a forty-day solicitation period.112 Con-
spicuously absent from the agreement were any restrictions providing
topping rights or disclosure of information regarding alternative bidders that
emerged during the solicitation period. Indeed, the agreement specified that
Triad was not required to provide the material terms of any subsequent offer
made during the period113 and that Triad was not required to reveal the iden-
tity of a party making such an alternative offer.114 The agreement provided
for a $120-million (2.6%) break-up fee for offers received after the solicita-
tion period and a $20-million (0.4%) break-up fee with reimbursement of up
to $20 million in expenses for offers received during the solicitation
period.115 The result of this go shop was a subsequent bid from CHS of $5.1

   102. Id. § 7.4(d).
   103. Id. § 5.2(e)(ii).
   104. Id. § 5.2(d).
   105. Rebecca Smith, Susan Warren & Dennis K. Berman, In TXU Deal, Texas Regulator Has
Few Levers to Pull, WALL ST. J., Feb. 27, 2007, at A3.
   106. TXU Corp., Agreement and Plan of Merger (Form 8-K), § 6.2(a) (filed Feb. 26, 2007).
   107. Id. § 8.5(b).
   108. Id. § 6.2(e)(ii)(A).
   109. Id. § 6.2(e)(ii)(B).
   110. David Shabelman, Topps Not a Done Deal for Eisner Group, THEDEAL.COM, Apr. 16,
2007, available at FACTIVA, Document No. DLDL000020070416e34g00015.
   111. Press Release, Triad Hosps., Inc., Triad Enters into Merger Agreement with CCMP
Capital Advisors and GS Capital Partners (Feb. 5, 2007), available at http://www.sec.gov/Archives/
   112. Triad Hosps., Inc. Merger Agreement, supra note 57, § 7.4(a).
   113. Id. § 7.4(d).
   114. Id. § 7.4(c).
   115. Id. § 1.1.
1138                                  Texas Law Review                              [Vol. 86:1123

billion (not including the $1.7 billion assumption of debt); thus, the share-
holders received an additional $3.75 per share due to Triad’s

     3. Development of the Go Shop.—Increased regulatory and judicial
scrutiny of corporate boards of directors combined with fast-paced market
developments have caused boards faced with the sale of a corporation to be-
come uncomfortable with the traditional “wishin’ and hopin’”117 approach to
obtaining the best value reasonably available. To relieve this discomfort,
boards have increasingly become involved in actively overseeing corpora-
tions generally;118 the go shop manifests such active involvement in the
context of the corporation’s sale.
      Target boards have additionally found themselves in an expanding
thicket of possible legal liability. Sarbanes-Oxley119 has increased the
board’s oversight duties and subjected directors to additional penalties.120
Additionally, boards have continually sought a predictable path to satisfying
their duties under Revlon. However, the Delaware Supreme Court’s decision
in Omnicare121 made it clear that a board cannot rest easy believing it has
satisfied its Revlon requirement until the fat lady has sung—that is, until the
shareholders have voted.122 Target boards have reacted to this increased
postsigning scrutiny by employing the go shop in order to take a more active
role in the postsigning activity. Because go shops provide legal protection to
the board of directors from allegations of neglecting profitable business
approaches, “it’s possible [go shops] will become more prevalent as boards
remain cautious in the face of increasing shareholder activism and height-
ened regulations.”123

    116. Francis, supra note 65.
    117. As discussed supra notes 49–53 and accompanying text, the no shop’s inert postsigning
market check causes target boards to keep “wishin’ and hopin’ and thinkin’ and prayin’,” DUSTY
SPRINGFIELD, Wishin’ and Hopin’, on A GIRL CALLED DUSTY (Philips Records 1964), that they
have obtained the best value reasonably available or alternatively that an interloping bidder will step
forward on its own accord.
    118. See Kaja Whitehouse, Move Over, CEO: Here Come the Directors, WALL ST. J., Oct. 9,
2006, at R1 (describing the increasing involvement of directors in the operations of a corporation).
    119. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (codified in scattered
sections of 11, 15, 18, 28, and 29 U.S.C.).
CAPITAL MARKETS REGULATION 90 (2006), available at http://www.capmktsreg.org/pdfs/11.30
    121. Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914 (Del. 2003).
    122. See Burgess, supra note 49, at 468 (“The board of directors, when acting within their
fiduciary duty of care, has a continuing duty during the time between the signing of the merger
agreement and the stockholder vote to avail itself of information regarding potentially superior
    123. Sikora, supra note 14, at 12 (quoting Daniel Tiemann, nationwide operations leader for
KPMG Transactions Services program).
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