In a question of first impression, the Court of Chancery appliedRevlon Inc. v. MacAndrews & Forbes Holdings Inc. ‘s heightened standard of review to determine whether to enjoin a merger split evenly between cash and stock consideration. As regular readers ofDBCI know,Revlon requires corporate boards, under certain circumstances, to focus their efforts on maximizing the company’s value in order to obtain the best possible price for stockholders.
Though the court ultimately declined to enjoin the merger,In re Smurfit-Stone Container Corporation Shareholders Litigation provides a detailed, if fleeting, glimpse into the court’s consideration of increasingly complicated deals involving both cash and stock consideration. Since the Delaware Supreme Court ultimately will have the last word onRevlon ‘s scope – a reality Smurfit-Stone recognizes – this case is likely just a prelude to the next chapter of theRevlon saga.
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