January 7, 2011
Has the market killed "Just Say No"?
So says Donald Drapkin. Although the law hasn't moved this far, yet markets and investors just won't let it happen anymore. Drapkin's observation highlights the sea-change that has occurred over the past three decades. During the 1980s target boards sought to keep acquirors away - the hostile acquisition and entrenchment concerns guided the development of the corporate law. Now, times have changed. There are a few boards (Airgas, Genzyme, etc) who fight acquisition attempts. Many more, however, can see the payday. The real question these days is not of the entrenchment of the 1980s, but of management conflicts in the going private or cash out sale (e.g. J. Crew). The law is still developing to deal with those conflicts.
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