The Delaware Chancery Court refused to preliminarily enjoin a cash tender offer after finding that the deal protection measures associated with the tender offer were not overly burdensome so as to deter other bidders. The deal protection measures included a top-up option, a no-shop clause, provisions guaranteeing the acquirer the right to match offers and receive the same information the target company provided other bidders, and a termination fee payable if the target company withdrew from the transaction or the target company stockholders failed to tender a majority of their shares. The target company also agreed to rescind its poison pill only for the acquirer. The court also took notice of the 40% premium over market price represented by the cash tender offer price. The court advised that courts should be wary of depriving shareholders of the opportunity to participate in cash tender offers at a significant premium above market price.
In re Orchid Cellmark Inc. S'holder Litig., C.A. No. 6373 (Del Ch. May 12, 2011)