TABLE OF CONTENTS

PREFACE
ACKNOWLEDGMENTS
TABLE OF CASES

PART I. THE SOURCE OF GAINS IN BUSINIESS COMBINATIONS

Chapter. One. The History of Business Combinations
1.Introduction
2. Acquisitions and the Problem of Monopoly
Industrial Market Structure and Market Performance
Economic Report of the President Together With the Annual Report of the Council ofEconomic Advisers
3. The History of Securities Laws and Acquisitions
Tender Offers for Corporate Control
4. State Responses to Acquisitions—from Enabling Corporation Laws to Antitakeover Statutes
5. A Primer on Acquisition Techniques
A. Market Techniques—tender Offers
B. Negotiated Transactions: the Choice of Mergers or Asset Sales

Chapter Two. Economic Justifications for Acquisitions
1. Theories of Business Valuation
2. Efficient Capital Markets
Signalling and Causation in Insider Trading
3. Theories About Motivations for Acquisitions
Mergers and the Market for Corporate Control
The EVA Financial Management System
4. Efficient Markets and the Paradox of the Search for Bargains
Two-Tier Tender Offers and Shark Repellents
Taking Discounts Seriously: The Implications of "Discounted" Share Prices as an Acquisition Motive
Note on Event Studies
Bidder Overpayment in Takeovers

PART II. DUTIES AND RISKS OF SELLERS

Chapter Three. Duties of the Board of Directors
1. Introduction
2. LoyaltyDutiesofDirectors
Unocal Corporation v. Mesa Petroleum Co
Note
Note on Williams v. Geier

2. Loyalty Duties of Directors—Continued
Mills Acquisition Co. v. MacMillan, Inc
Problem
3.The Economics of Defeated Bjds
The Market for Corporate Control: The Scientific Evidence
Takeover Bids in the Target's Boardroom
Do Targets Gain From Defeating Tender Offers2
Long-Term Results ofDefeated Tender Offers
4.Contractual Approaches to Loyalty Issues
Controlling Management Opportunism in the Market for Corporate
Control: An Agency Cost Model
Note on Taxation of Golden Parachutes
Gaillard v. Natomas Company
Note on Tin Parachutes
Corporate Directors and the "Social Costs of Takeovers" Reflections on the Tin Parachute
5.InformationalDutiesofDirectors
Smith v. Van Gorkom
Note on Post-Trans Union Developments
Problem
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc
Problems
Barkan v. Amsted Industries, Incorporated
Problem
In Re Fort Howard Corporation Shareh.lders Litigation
Note on Emerson Radio Corp. v. International Jensen, Inc
In Re RJR Nabisco, Inc. Shareholders Litigation
Note
Problems
Paramount Communications, Inc. v. Time Incorporated
Note on the Application of Time—Paramount
Problems
Note on Mendel v. Carroil
6.The Saie of Control
Essex Universal Corporation v. Yates

Chapter Four. Risks of Selling Too Cheaply
1.Providing Bargaining Power for Target Management
A.Shark Repelients
Two-Tier Tender Offers and Shark Repellents
Seibert v. Gulton Industries, Inc
Note on Shark Repelients and Differential Voting
B.Protecting the Board from Proxy Fights
Blasius Industries, Inc. v. Atlas Corporation
Problem
Note on Defenses to Proxy Fights
Note on Staggered Board Provisions
Note on Delaware Law on Filling Vacancies on the Board
C.New Stock Issues
Note on Condec Corporation v. Lunkenheimer Co
Telvest, Inc. v. Olson
1. Providing Bargaining Power for Target Management-Continied
D.Poison Pills
Rev. Rul.90-11
Moran v. Household International, Inc
Problem
The Amalgamated Sugar Company v. NL Industries, Inc
Note on the Stock Price Effects of-Rights Plans
Note on the Application of Unocal to Redemption of Rights
Invacare Corporation v. Healthdyne Technologies, Inc
International Brotherhood of Teamsters General Fund v. Fiem-
ing Companies, Inc
Note
Carmody v. Toli Brothers, Inc
Quickturn Design Systems, Inc. v. Shapiro
Note on "Continuing Director" or "Dead Hand" Provisions in
RightsPlans
Note on the Convergence of Biasius and Unocal Doctrines
E.Stock Repurchases
AC Acquisitione Corp. v. Anderson, Clayton & Co
Note on In re Unitrin, Inc. Shareholders Litigation
F.Employee Stock Ownership Plans
ESOPs: What They Are and How They Work
Note on Business Combination Statutes
Shamrock Holdings, Inc. v. Polaroid Corporation (In Re Polar-
oid Shareholders Litigation)
Note
G. Confidentiality, Standstill Agreements and White Squires
Ivanhoe Partne v. Newmont Mining Corporation
2.Disclosure Issues in Takeover Defenses
Disclosure in Proxy and Information Statements: Anti-Takeover or
Similar Proposais
Problem
3.Appraisal Rights of Dissenting Shareholders
A.The Development of Appraisal Rights
B.The Methodology of Valuation
Note on the Delaware Biock Method of Valuation
Comment: Valuation in the Context of Share Appraisal
C.Statutory Constraints on Valuation
Cede & Co. v. Technicolor, Inc
Note on Cavalier 0i1 Corp. v. Harnett
Rapid-American Corporation v. Harris
4.Takeouts and Fairness
Singer v. the Magnavox Company
Note on the Business Purpose Test
Weinberger v. UOP, Inc
Problem
Note on the Limits of Special Committees
Rosenblatt v. Getty
Rabkin v. Phiiip A. Hunt Chemical Corporation
Note on Schnell v. Chris-Craft Industries, Inc
Kahn v. Lynch Communication Systems, Inc
Note on Kahn v. Tremont Corporation
4. Takeouts and Fairness—Continued
Grace Bros. v. Farley Industries, Inc
5. The Risks of Selling at Too High a Price
Note on Contractual and Statutory Creditor Protection
Smith & Warner, On Financial Contracting: An Analysis of Bond Covenants
Wieboldt Stores, Inc. v. Schottenstein
Matter of Munford, Inc., d.b.a. Majik Market, Debtor

Chapter Five. State Takeover Laws
1.First Generation Disclosure and "Fairness" Statutes
Edgarv. MITE Corp
2. Second Generation Statutes, the Williams Act and the Commerce
Clause
CTS Corp. v. Dynamics Corporation ofAmerica
Problem
3. Third Generation Statutes, the Williams Act and the Commerce
Clause
Amanda Acquisition Corporation v. Universal Foods Corporation
Note on Business Combination Statutes
4. The Proxy Rules and Federal Preemption of State Takeover Statutes
A. The Preemption Doctrine and the Proxy Regulations; the Pur poses of Federal Regulation
Securities and Exchange Commission v. Transamerica Corporation
National City Lines, Inc. v. LLC Corporation
Problems
The Business Roundtable v. Securities and Exchange Commission
B.Disgorgement Statutes
Note, How Do Pennsylvania Directors Spell Relief? Act 36
The Genius ofAinerican Corporate Law
C.Director Protection Statutes
D."Other Constituency" Statutes
Note

PART III. BUYERS' RISKS IN ACQUISITIONS

Chapter Six.Risks of Losing the Target
The Acquisition Mating Dance and Other Essays on Negotiating
1.What Is the Effect of a Letter of Intent?
United Acquisition Corp. v. Banque Pari bas
Drafting A Letter oflntent
Precontractual Liability and Preliminary Agreements: Fair Dealing and Failed Negotiations
Note on Arnold Palmer Golf Company v. Fuqua Industries, Inc California Natural, Inc. v. Nestle Holdings, Inc
2. Best Efforts Clauses, No-Shop Clauses and the Board's Power and Duties
ConAgra, Inc. v. Cargill, Incorporated
3.Providing Enforceability
Samjens Partners I v. Burlington Industries, Inc
Brazen v. Beli Atlantic Corporation
Note on Lock-up Options and Break-Up Fees
Note on Paramount Communications, Inc. v. QVC Network, Inc.
Problem
Jewel Companies, Inc. v. Pay Less Drug Stores Northwest, Inc
Note
4.Tortious Interference Claims
NBT Bancorp Inc. u. Fleet/Norstar Financial Group, Inc

Chapter Seven. Getting What You Pay For: The Buyer's
Search for Information
1.The Due Diligence Process Buying, Selling and Merging Businesses
Due Diligence Checklists
The Due Diligence Revim Memorandum Corporate Review in Connection WithMergers and Acquisitions
Escott v. BarChris Construction Corporation
Note
Due Diligence Problems
2. The Acquisition Agreement
Problem
John Borders v. KRLB, -Inc
Espianade 0i1 & Gas, Inc. v. Templeton Energy Income Corporation
US Airways Group, Inc. v. British Airways PLC

Chapter Eight. The Process of Obtaining Consent
1.Background Considerations
A.Tax Issues
i.Taxable Transactions
ii.Tax-Free Reorgarnzations
B.Accountinglssues
2.Mergers
A.The Statutes
New York Stock Exchange Listed Company Manual
Note on Voting Rules for Acquiring Corporations
B.Variations in Voting Rules
Schreiberv. Carney
Note
3.Triangular Mergers
Kirschner Brothers Ou, Inc. v. Natomas Company
4.Asset Sales
Gimbel v. The Signal Companies, Inc
Katz v. Bregman
4. Asset Sales—Continued
Note on Sales of Assets
The Structure ofthe Corporation: A Legal Analysis
Corporate Governance-
5. Asset Transactions and De Facto Mergers
Farris v. Glen Alden Corporation
Hariton v. Arco Electronics, Inc
Note on Independent Legal Significance
Problem
6.Successor Liability in Asset Purchases
Bulk Transfer Laws
A.De Facto Mergers Revisited
B.Product Une Liabiities
Ramirez v. Amsted Industries, Inc
Note on Product Line Successor Liabiiity
C.Assumed Liabilities
Antiphon, Inc. v. LEP Transport, Inc
D.Environmental Law Liabiities
E.Labor Relations Obligations
7.Tender Offers

PART IV. THE SECURITIES LAWS

Chapter Nine. Securities Law Issues iii Seiler Fivancing and Mergers
1.CoverageoftheSecuritiesLaws-
Reves u. Ernst & Young
2.The Timing of Registration and Disclosure
Chris-Craft Industries, Inc. v. Bangor Punta Corporation
Note
3.Exemptions From Registration
Bowers v. Columbia General Corporation
Note
4. Rule 145 and Registration Rights of Control Persons
5.State Regulation
6.Short Swing Profits
7.Investment Company Act Issues

Chapter Ten. The Williams Act
1.Federal Disclosure Regulation
2.Overview of the Williams Act
Toward a More Perfect Market for Corporate Control
3.Buyers' Obligations
A.Schedule 13D Filings
i.What is a "Person"9
GAF Corporation u. Milstein
Note on Group Formation
Problem
ii.Purposes of Group Formation
Problem---
iii.What is "Beneficial Ownership?"
3. Buyers' Obligations—Continued
Problem
iv. Calculating 5% of a Class of Equity Security
v.Disclosure Obligations
Problem
B.Beginning a Tender Offer and Schedule 14D-1 Filings
Weliman v. Dickinson
Hanson Trust PLC v. SCM Corporation
Note on the Beginning and End of Tender Offers
C.Disclosures at the Takeout
Flynn v. Bass Brothers Enterprises, Inc
Note on Disclosure Duties
Problem
Howing Co. v. Nationwide Corporation
Problem
4.Target's Obligations
A.Disclosure Obligations
Basic Incorporated v. Levinson
Starkman v. Marathon Oil Company
Note on State Law Disclosure Duties
B.Litigation Strategies
Piper u. Chris-Craft Industries, Inc
Liberty National Insurance Holding Company u. The Charter
Company
Note: Implied Rights of Action under the Williams Act
Note on Remedies
Schreiber v. Burlington Northern, Inc
United States u. O'Hagan
Problem
Appendix A. Glossary
Appendix B. Shark Rcpellent Amendment
Appendix C. Due Diligence Checklist
Appendix D. Merger Agreement and Plan of Reorganization
Appendix E. Sample Opinion Letter

INDEX