Will Investment Bankers Be Brushed Aside in Technology Deals? According to the New York Times, Google’s CEO Larry Page suggests a “toothbrush test” for potential acquisitions: ”Is it something you will use once or twice a day, and does it make your life better.” As technology M&A booms, investment bankers are playing a declining role in advising buyers, particularly in Silicon Valley. According to the New York Times, “the acquiring company did not use an investment bank in 69 percent of American technology acquisitions worth more than $100 million this year, according to Dealogic. That number was 27 percent 10 years ago.” Recent mega-deal examples of unadvised buyers include Apple’s acquisition of Beats Electronics, Google’s acquisition of Waze and Oracle’s agreement to purchase Micros Systems.
Wal-Mart Required to Provide Privileged Documents in Shareholder Demand for Corporate Records The Delaware Supreme Court recently upheld a decision requiring Wal-Mart to provide extensive records in response to a shareholder demand under Section 220 of Delaware corporate law, despite the privileged and confidential nature of the information. In Wal-Mart Stores, Inc. v. Indiana Electrical Workers Trust Fund IBEW, the court adopted the Garner doctrine, which allows “stockholders of a corporation to invade the corporation’s attorney-client privilege in order to prove fiduciary breaches by those in control of the corporation upon showing good cause.” The shareholder demand relates to an investigation of allegations of payments by Wal-Mart to Mexican officials in violation of the Foreign Corrupt Practices Act.
ISS Announces Equity Plan Data Verification Portal ISS, noting its “commitment to advancing the level of transparency and engagement in its data collection process,” announced a new way for companies to verify information used by ISS for recommendations on shareholder votes involving equity-based compensation plans. Companies are encouraged to register for the portal, allowing them access to ISS data and the ability to request modifications. Companies will only have a two-day window after receiving notice to request any such modification.
Disclosure Practice When a CEO Gets Sick The announcement in July that JPMorgan Chase CEO and Chairman Jamie Dimon had throat cancer is an example of the difficult disclosure decisions public companies face when a CEO gets sick. Deciding what to say and when to say it involves a delicate balance between investors’ need for disclosure and the CEO’s right to privacy. The reviews suggest that JPMorgan Chase did this well, while Apple, when handling disclosures about Steve Jobs’ illness, did not.
The Ticker is published by Fredrikson & Byron’s Public Companies Group and shares recent developments in SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors.