In Abrons v. Maree, read opinion here , the Chancery Court rejected a request for a preliminary injunction to stop the tender offer of a controlling shareholder for the remaining shares it did not own. The court reviewed the prerequisites for a P.I., and after determining that there was no likelihood of success on the merits, did not need to reach the other prerequisites. The claims addressed were that the controlling shareholder failed to make necessary disclosures about the details of the offer.
The court analyzed the argument that the wrong tax rate was used for projections and that the special committee may not have reviewed all the relevant details. The court noted that materiality should not be confused with misleading disclosures and reasoned that:
… it is hard to conceive that a reasonable investor would consider it material to know that the special committee did not itself review the long-term projections and placed no weight on them. Only when minor details alter the total mix of information by implying a significantly higher value, or a critical flaw in the process used, can they be material.
The court analyzed also whether the proper standard of review was entire fairness or whether the Silconix line of cases applied ( See, In Re Siliconix S’hldrs Litigation, 2001 WL 716787 (Del. Ch., June 19, 2001), for the line of cases supporting the view that the entire fairness standard does not apply to a non-coercive tender or exchange to acquire shares from a minority). The court also noted that in a short-form merger under DGCL Section 253, when one party already owns 90% of the stock, the only remedy is appraisal under DGCL Section 262.