The Deal Professor blog, by Steven Davidoff, has a post here that discusses the issue of whether the Delaware Court of Chancery will ever require that a poison pill be redeemed. He also describes as "must reading" for corporate lawyers the transcript of a hearing yesterday, that he makes available here, that addresses the issue. Of course this issue is of interest to both those who are "deal lawyers" as well as those involved in the litigation of deals. The post begins with the following introduction:
Broadcom’s hostile offer for Emulex appears to be heading toward an ignominious end. After raising its offer on June 29 to $11 a share, Broadcom has announced that it will let its tender offer expire on July 14 if Emulex does not agree to be acquired at that price or otherwise come to the bargaining table. Emulex appears unwilling to do so, and so this offer seems poised to die, at least for now.
Still, a hearing on Monday before Vice Chancellor Leo E. Strine Jr. in Delaware Chancery Court, about litigation arising from Broadcom’s offer, has produced a must-read transcript for deal lawyers and the academics who study deals.
Vice Chancellor Strine’s comments expose some possible flaws in Broadcom’s current strategy and address a question of much wider import — when, if ever, will the Delaware courts order a poison pill to be redeemed?