The Delaware Court of Chancery declined to enjoin a merger despite finding that the board of directors likely failed to satisfy their "Revlon" duties in connection with a sale of the company. In sale of company transactions, the "Revlon" duties require the directors to seek to attain the highest value reasonably available for the stockholders. The court determined not to enjoin after finding that the merger transaction at issue represented the only opportunity for the stockholders to receive a premium for their shares.
The court nevertheless criticized the board's sales process as unreasonable. In effecting the merger transaction, the board pursued a single-bidder strategy for selling the company. The court criticized this strategy based on the board's lack of knowledge as to the company's value and failure to conduct a market check for the purpose of determining whether there were other potentially interested bidders. The court took particular note of the fact that two private equity firms that had previously considered investing in the company had signed standstill agreements barring them from requesting a waiver of the standstill provision without the consent of the issuer and the other company party to the merger.
Koehler v. NetSpend Holdings Inc., C.A. No. 8373-VCG (Del. Ch. Ct. May 21, 2013).