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Court of Chancery Explains Standard of Review for Tender Offer

Posted In M&A

In Re Cox Radio Shareholders Litigation, C.A. No. 4461-VCP (May 6, 2010)

The standard of review that a court applies to a transaction may determine the outcome of the litigation in a close case.  Here the Court explains that entire fairness does not govern the review of a noncoercive tender offer by a controlling shareholder.  This continues the trend away from applying the test of Kahn v. Lynch that is now restricted to mergers involving a controlling shareholder.  This decision also explains when a tender offer is deemed not to be coercive.

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