When a consortium that included three U.S. private equity firms announced an all-cash, $51 billion transaction to buy Canadian telecommunications giant BCE Inc. in June 2007, the buyers–or at least the American buyers–probably had no reason to believe that the deal was susceptible to a concerted legal assault that would jeopardize the largest leveraged buyout in history.
Indeed, the offered price of $42.75 per share was a 20 percent premium to the share’s trading range, a solid indication that the directors who had approved the deal had maximized shareholder value. And since the 1986 decision by the Delaware Supreme Court in Revlon Inc. v. MacAndrews & Forbes Holdings Inc., U.S. courts had been clear that maximizing shareholder value involved an overriding duty to act only in the best interests
of shareholders.
