Deal protections have become increasingly popular in corporate merger agreements over the past decade, and they have also become increasingly more varied. One of the more popular deal protection measures is a matching right that enables an accepted bidder to match any subsequent bid that comes in. It is virtually ubiquitous in modem deals. Such ubiquity has led to potential problems. When Delaware courts review challenges to deal protection measures they are supposed to use an intermediate standard of review. Instead, however, the Delaware Court of Chancery appears to be subjecting matching rights to nothing more than a cursory glance, which stands in stark contrast to how the court treats other deal protection measures.
This Comment discusses that appearance of permissiveness. In addition, this Comment discusses the proper standard of review for deal protection measures and analyzes how courts ought to review deal protection measures. Finally, this Comment suggests a reason for the alleged permissiveness and discusses a solution that will enable Delaware courts to properly review challenges to matching rights.
Andrew D. Kinsey,
Hand-Waving as a New Standard of Review: When Analyzing Matching Rights, has the Delaware Court of Chancery Abdicated its Review Process?,
Dick. L. Rev.
Available at: https://ideas.dickinsonlaw.psu.edu/dlra/vol121/iss3/7