Center for Law and Economic Studies
Center for Contract and Economic Organization
Delaware's new approach to takeover law is announced in three cases that address different aspects of management's role in the standard drama of defending against a hostile takeover. Unocal Corp. v. Mesa Petroleum Co.1 scripts a main act for the drama by prescribing a duty to compare the outsider's offer with the universe of other options and, if necessary, to resist the outsider within the guidelines fixed by the proportionality test.2 Moran v. Household International, Inc.3 writes a prologue by encouraging management to plan a vigorous defense that can thwart a coercive offer without damaging the company. Finally, Revlon Inc. v. MacAndrews & Forbes Holdings4 surveys the entire drama and supplies an epilogue for occasions when the best interests of shareholders will no longer permit the target to remain independent.
Ronald J. Gilson & Reinier Kraakman,
What Triggers Revlon,
Wake Forest L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/892