Event-Driven Investors Don't Always Vote 'Yes'

Law360, New York (May 31, 2013, 10:01 AM EDT) -- In recent months, two major M&A transactions, MetroPCS/T-Mobile and Plains Exploration/Freeport McMoRan, were on the verge of being voted down by target company shareholders when the acquiror saved the deal by raising the value of its bid. What made these situations extraordinary was the absence of any competing offer.

Stockholders rarely reject a merger without the expectation of a better offer from someone else, in part because arbitrageurs and other event-driven investors are typically the largest stockholder group in companies that enter into M&A agreements. The...
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