{"id":26,"date":"2014-05-12T10:30:32","date_gmt":"2014-05-12T14:30:32","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/?p=26"},"modified":"2014-09-10T11:07:29","modified_gmt":"2014-09-10T15:07:29","slug":"dgcl-sec-251h-makes-two-step-mergers-easier-to-complete","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/2014\/05\/12\/dgcl-sec-251h-makes-two-step-mergers-easier-to-complete\/","title":{"rendered":"DGCL Sec. 251(h) Makes &#8220;Two-Step&#8221; Mergers Easier to Complete"},"content":{"rendered":"<p>While not necessarily \u201cbreaking news\u201d at this point, as of August 1, 2013, the Delaware General Corporation Law was amended to make two-step mergers\u2014tender offers with back-end mergers\u2014easier to complete. Pursuant to new <a href=\"http:\/\/delcode.delaware.gov\/title8\/c001\/sc09\/\" target=\"_blank\">\u00a7 251(h)<\/a>, third-party acquirors and targets may enter into merger agreements that specifically opt in to this statute and will allow the acquiror to complete the second-stage merger without a shareholder vote if the acquiror obtains a sufficient number of shares in the opening tender offer (usually more than 50%) that its vote alone would be sufficient to approve the merger.<\/p>\n<p><!--more-->Prior to the enactment of this statute, parties to two-step merger transactions were often forced to either obtain 90% of the shares in the tender offer (in order to use the \u201cshort-form\u201d statute) or use a \u201ctop-up\u201d option to avoid the more cumbersome\u2014and expensive\u2014long-form merger on the back end of the transaction.<\/p>\n<p>Three points are important to remember: (1) this statute may only be used in transactions between a non-affiliated or non-interested, third-party stockholders and a target with shares listed on a national exchange or held by more than 2000 stockholders; (2) this is an \u201copt in\u201d statute, so the merger agreement must cite its applicability; and (3) no matter what the type of consideration (cash, shares of a publicly-traded company, etc.), the merger is subject to appraisal rights.<\/p>\n<p>Tender offers seem to have fallen off in popularity in recent years, but with this amendment to the DGCL, we would expect to see acquirors using them with more frequency.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While not necessarily \u201cbreaking news\u201d at this point, as of August 1, 2013, the Delaware General Corporation Law was amended to make two-step mergers\u2014tender offers with back-end mergers\u2014easier to complete. Pursuant to new \u00a7 251(h), third-party acquirors and targets may enter into merger agreements that specifically opt in to this statute and will allow the &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/2014\/05\/12\/dgcl-sec-251h-makes-two-step-mergers-easier-to-complete\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;DGCL Sec. 251(h) Makes &#8220;Two-Step&#8221; Mergers Easier to Complete&#8221;<\/span><\/a><\/p>\n","protected":false},"author":108,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[9,8,5,10],"ppma_author":[153],"class_list":["post-26","post","type-post","status-publish","format-standard","hentry","category-general","tag-dgcl","tag-merger","tag-renck","tag-tender-offer"],"authors":[{"term_id":153,"user_id":108,"is_guest":0,"slug":"rlrenck","display_name":"Richard L. Renck","avatar_url":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-content\/uploads\/sites\/16\/2014\/08\/renckrichard-125x150.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/posts\/26","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/users\/108"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/comments?post=26"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/posts\/26\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/media?parent=26"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/categories?post=26"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/tags?post=26"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/ppma_author?post=26"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}