Are no-talk clauses in stock-for-stock merger agreements dead in Delaware? Three recent cases from the Delaware Chancery Court appear to allow a board of directors to consider other merger offers even if the board has agreed to a no-talk provision with an initial suitor.

No-talk clauses, in essence, forbid a target’s board of directors from engaging in merger discussions with other bidders — even those presenting bona fide unsolicited offers — until a shareholder vote occurs on the initial bid. The clause allows acquirors to protect the substantial investment necessary to make the offer, and helps targets lock in a deal that might not otherwise occur.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]