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Court Of Chancery Permits Discovery On Offer Strategy

Posted In M&A

Air Products & Chemicals, Inc. v. Airgas, Inc., C.A. 5249-CC (December 23, 2010)

In this latest chapter of the Airgas takeover saga, the bidder may have bitten off more than it wanted.  In the past, the Court of Chancery has recognized an immunity from having to disclose a party's strategy in an on-going takeover fight.  Known as the "business strategy" privilege, the idea is that litigation should not be used to gain a negotiating advantage.  Here the bidder asked for sensitive discovery and the Court, while granting that request, also permitted discovery on whether the bidder's self-proclaimed "best and final" offer was in fact the best it would do to acquire Airgas.

Given that the bidder had told the Court its offer was its best and final, it had better be true.

Tags: M&A
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