Omnicare of "Questionable Continued Vitality"

The Omnicare case is of "questionable continued vitality" notes a new opinion from the Delaware Chancery Court.  In Optima v WCI Steel, the Chancery Court refused to apply Omnicare to block a deal between Severstal and WCI in the face of a higher bid from Optima.  The WCI union, interpreting a collective bargaining clause to give them veto power over any acquisition, sided with Severstal.  The Court held that the provision, imposed by a bankruptcy court and not the board, was not a deal protection device.  It also held that a requirement of a written consent vote by shareholders 24 hours after the merger was signed was not a deal protection device either but simply a ratification timing requirement.  The holding that Omnicare does not require a "fiduciary out" clause after the vote to enable the target to accept other offers surprised some, but not I.  The right to terminate a merger after a shareholder vote must itself be preserved in the merger agreement (See Section 251(d)) and is and always has been optional.  The case is notable because of dicta on the "questionable continued vitality" of Omnicare, a decision that was poorly reasoned on its facts and has caused trouble ever since its promulgation.  The Supreme Court, at some point, will have to grapple with setting sensible limits on a board's ability to bind the firm in merger negotiations.