Wednesday, July 11, 2012

M&A Deals Under Siege

One of my favorite movies is Under Siege, the film in which Steven Segal portrays Casey Ryback, a Navy cook and former Navy Seal forced into action to save a U.S. battleship from a terrorist takeover led by Tommy Lee Jones. As much as I loved that movie, I was shocked to learn that it was actually nominated for two Academy Awards! See 

Anyway, I couldn't help but think of Under Siege when I read the following statistic in The Economist magazine.  96% of M&A transactions over $500 million faced legal challenges in 2011.  That's up from 39% in 2005.  Thus, any party to a significant M&A transaction should expect to be sued.  That's why it is critical that the board of directors of any company undertaking an M&A transaction carefully plan the transaction process to ensure a fair process and a fair price for the target's shareholders.  That planning should include engaging experienced bankers and transaction lawyers to help walk the company through a process that should be expected to be reviewed and second-guessed in a courtroom after the deal is announced.   

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