Standstills And No Shops: A Potentially Dangerous Mix

Law360, New York (April 23, 2012, 6:21 PM EDT) -- The Delaware Court of Chancery, in its recent ruling, In re Celera Corporation Shareholder Litigation C.A. No. 6304-VCP (March 23, 2012), addressed whether the flexibility intended to be provided by the customary “fiduciary out” clause in acquisition agreements was improperly limited by standstill agreements that the target company had entered into with prospective third-party bidders in the presigning auction period.

With respect to In re Celera, the standstill agreements prohibited bidders from making acquisition offers without the target board’s consent and also from requesting the target...
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