571 A.2d 1140 (Del. 1989)
Plaintiff shareholders filed suits against defendant corporation seeking a preliminary injunction to halt defendant's offering of shares in preparation of a merger. The lower court denied plaintiffs' motion on the grounds that defendant did not breach the business judgment rule in making a tender offer.
- On appeal, plaintiffs asserted that defendant's tender offer triggered a Delaware merger precedent, requiring defendant to maximize shareholder value before the merger.
- The state supreme court affirmed the lower court, holding that defendant reasonably responded to a competing offer in a reasonable and proportionate manner.
- Further, defendant's response in creating a merger would not place the transaction in violation of the business judgment rule where plaintiffs' alleged a corporate threat solely centered on inadequate stock value.
The state supreme court affirmed the lower court's dismissal of plaintiffs' request for a preliminary injunction on the ground that defendant's decision to initiate a merger was made in a reasonable and proportionate fashion.
Recommended Supplements for Corporations and Business Associations Law