Tuesday, March 1, 2011
Andrew Ross Sorkin notes what others have been suspecting for some time -- that the go-shop is just a fig leaf to insure against potential liability in management-led buyouts. Reminds me of the paper on go-shops by Guhan Subramanian from two years ago, Go-shops vs. No-shops. In part he found:
I also find no post-signing competition in go-shop management buyouts (MBOs), consistent with practitioner wisdom that MBO's give incumbent managers a significant advantage over other potential buyers. Taken as a whole, these findings suggest that the Delaware courts should generally permit go-shops as a means of satisfying a sell-side board's Revlon duties, but should pay close attention to their precise structure, particularly in the context of go-shop MBOs.