M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Tuesday, March 1, 2011

Go-shop just a fig leaf?

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.

-bjmq

http://lawprofessors.typepad.com/mergers/2011/03/go-shop-just-a-fig-leaf.html

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