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Business Organizations Law

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2010

Research Collection School Of Law

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The Validity Of Deal Protection Devices In Negotiatiated Acquisition Or Merger Transactions Under Anglo-American Law, Wai Yee Wan Apr 2010

The Validity Of Deal Protection Devices In Negotiatiated Acquisition Or Merger Transactions Under Anglo-American Law, Wai Yee Wan

Research Collection School Of Law

This paper analyses deal protection devices, specifically termination fees and lockup agreements, that are entered into by publicly listed target companies in favour of the preferred bidders, under Anglo-American law. US (specifically Delaware) and UK law and regulation differ markedly in the regulation of these devices. Delaware law generally gives more leeway for the target board to enter into deal protection devices. The UK regime is much more shareholder-centric and severely restricts most types of deal protections. This paper explains the differences and argues that the UK regime is the result of the strong influence of institutional share ownership. In ...