Minority Freeze-Out Transactions Revisited

Law360, New York (September 7, 2010, 4:05 PM EDT) -- It is not uncommon for controlling stockholders of U.S. publicly listed corporations to engage in minority freeze-out transactions — that is, the acquisition by the controlling stockholder of the interest in the corporation held by the minority stockholders.

The acquisition is typically accomplished by either a one-step merger or a two-step transaction comprising a tender offer followed by a short-form merger once the controlling stockholder has acquired 90 percent of the target corporation.

Minority freeze-out transactions have been closely scrutinized by Delaware courts in light of...
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