Dissenting-Shareholders Clauses May Become More Common

Law360, New York (February 20, 2014, 1:53 PM EST) -- A dissenting-shareholders condition in a merger agreement permits an acquirer[1] not to close the merger if the holders of more than a specified percentage of outstanding shares exercise appraisal rights. Generally, appraisal rights allow a shareholder of a corporation that has been acquired in a merger to be paid the “fair value” of its shares, as determined by a court, instead of accepting the merger consideration.[2]

While an acquirer would not typically have a right to terminate the merger agreement if the dissenting-shareholders condition is not...
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