Law Commons^™

Time To Amend The Delaware Takeover Law, Stephen M. Shapiro, Dorothy S. Lund

Faculty Scholarship

As Professor Subramanian demonstrates with cogent statistical evidence, now is the time for the courts to put Section 203 in the dock and examine its constitutional merits. Better still, the Delaware legislature should clean house and amend this provision's criteria. In practical effect, it forbids a competitive tender offer, injuring shareholders who benefit from tender offer premiums, and the national economy, which benefits from the gravitation of industrial resources to their highest-valued uses.

Following the U.S. Supreme Court's decision in Edgar v. MITE Corp., which invalidated an Illinois takeover statute, the federal district court in Delaware routinely enjoined application of …