Sunday, May 13, 2007
Over at the Harvard Law School Corporate Governance Blog, Mark A. Morton, a partner at the Delaware law firm of Potter Anderson & Corroon LLP, has posted his paper Go-Shops: Market Check Magic or Mirage? He and his co-author, Roxanne L. Houtman, detail the history, and survey the use, of "go-shops". They find only one instance since 2004 of a standard, limited-period "go shop" which resulted in another higher, bid, that of the acquisition of Triad Hospitals. Based on this review, they conclude that "our practical experience suggests that while go-shops may be beneficial in some circumstances, they may serve as mere window dressing in other cases. If so, then judicial skepticism of the benefit of a go-shop is warranted in the latter cases." Regular readers of this blog will note their conclusion is similar to my own sentiments on these provisions.
Practitioners will also be particularly interested in the handy chart they have compiled which summarizes the material terms of every “go shop” provision used since 2004 through to March 8, 2007.