Speed, shareholder activism and regulatory gaps are behind
the upswing in hostile M&A in the US over the past
Delaware courts have reaffirmed that target board control
still prevails in US hostile takeovers, most recently in the
Airgas v Air Products decision. But target defences
are being tempered with on a scale not seen before, and some
predict a slight tilting of power towards bidders and
Staggered board and a poison pill on the shelf –
the hallmarks of hostile defence strategies – have
been whittled away over the past ten years.
In 2001, more than half of the S&P 500 had staggered
boards. Now there are just 142. Similarly, the number of
companies with poison pills has dropped from 2200 to 900 over
the same period.
US counsel agree these are still the best tools for a target
board-defence kit, but that staggered boards, which are