John Grossbauer of Potter Anderson notes: In In re Plains Exploration & Production Co. Shareholder Litigation, Delaware Vice Chancellor Noble rejected claims for breach of duty based on alleged Revlon breaches and alleged disclosure violations in connection with a merger approved by the board of directors of Plains consisting of 7 independent directors and the CEO, who stood to receive a large payout as well as to become a senior officer of the combined company if the proposed transaction with Freeport-McMoRan Copper & Gold is approved.

The Court found no Revlon breach in the Board failing to form a special committee and in letting the CEO lead the negotiations with Freeport. Likewise, the failure to engage in a pre-signing market check or go-shop and the failure to negotiate a collar on the stock component of the consideration or obtain an equity "kicker" did not rise to the level of a breach of duty. The Court found the deal protections to be reasonable as well.

On the disclosures, the Court rejected claims that, among other things, unlevered free cash flow number be disclosed, because the Company did not provide them to its financial adviser, and that other alleged omissions about the banker's methodology were "quibbles." The Court also rejected claims concerning alleged omissions about conflicts by the CEO and bankers, saying they were adequately disclosed (including the fact the financial advisor may have holding in Freeport).

Here's an excerpt from this Skadden Arps' memo about Japanese M&A:

The Nikkei has skyrocketed more than 50 percent over the last six months. Goldman Sachs has issued a report predicting a further 20 percent gain in the index before year-end. Japanese companies were the third-most active group of acquirers in the world in 2012, behind only the U.S. and virtually tied with Canada for second place.

This ferment of activity is taking place largely under the radar -- as global attention is far more focused on the potential economic effects accompanying China's emergence on the world stage.

What are the drivers of this uptick in Japanese outbound M&A activity? Is it sustainable? What are the challenges for the Japanese economy and its private sector? What are some practical tips for bridging the inevitable cultural gaps associated with Japanese company dealmaking? The following discusses what is happening in Japan to magnify its participation in the global M&A marketplace and what the future may hold.

Trending Upward: A Look at Record Japanese Activity

From the vantage point of the U.S. M&A market, Japan was the top inbound acquirer of U.S. targets in 2012, with more than one-quarter of the market share of deal value. By contrast, China represented about 7 percent of deal value and was only the fifth-most active acquirer of U.S. companies last year. While Japan's 2012 figure certainly was impacted by the $20.1 billion Softbank/Sprint megadeal announced in October, the country's participation in the U.S. M&A market has been trending steadily upward since 2009. Viewed over a longer period of time, Japanese outbound M&A activity is at an all-time high, far surpassing the late 1980s when Japanese investors were buying Rockefeller Center, Pebble Beach, Columbia Pictures and other high-profile assets worldwide. In fact, the deal value of outbound Japanese M&A in 2012 was more than three times that of 1990, considered the peak year of that era. Yet this resurgence of deal flow has not been a center of focus in the news media today, reflecting our view that Japanese companies appear to be welcome buyers in today's environment.

Tune in today for the webcast - "FCPA Issues in Deals Today" - to hear Mauricio Espana and Derek Winokur of Dechert and Rebekah Poston of Squire Sanders explain how FCPA diligence is being conducted, how reps & warranties related to FCPA violations are being negotiated, and more. Please print off these course materials in advance.

This academic study is food for thought regarding the time spent negotiating walk-away rights in public M&A deals. Here is the abstract:

Practitioners and academics have long assumed that the legal terms of acquisition agreements add value to mergers, yet legal scholarship has failed to subject this premise to empirical scrutiny. The conventional wisdom is that markets must value the tremendous amount of time and money that M&A lawyers invest in negotiating and tailoring the legal provisions of acquisition agreements to address the distinctive risks facing each merger. Otherwise, the merging parties would not spend so much on legal fees. But the empirical question remains of whether the legal terms of acquisition agreements add any value beyond the financial terms of mergers (negotiated by investment bankers). For this reason we designed a modified event study of target company stock prices that shows that M&A lawyers' extensive negotiations on the legal terms of acquisition agreements do not add significant value to mergers.

Our analysis of target company stock prices leverages the fact that merger announcements (which lay out the financial terms) are generally disclosed one to four trading days before the disclosure of acquisition agreements (which delineate the legal terms). We focused on a data set of cash-only public company mergers spanning the decade from 2002 to 2011 to ensure that the primary influence on target company stock prices is the expected value of whether a legal condition will prevent the deal from closing.

Our analysis shows that there is no economically consequential market reaction to the disclosure of the acquisition agreement. Markets appear to recognize that parties publicly committed to a merger have strong incentives to complete the deal regardless of what legal contingencies are triggered. We argue that the results suggest that M&A lawyers are fixated on the wrong problems by focusing too much on negotiating "contingent closings" that allow clients to call off a deal, rather than "contingent consideration" that compensates clients for closing deals that are less advantageous than expected. This approach can enable M&A lawyers to protect clients against the effects of the clients' own managerial hubris in pursuing mergers that may (and often do) fall short of expectations.

Hats off to Kevin LaCroix for another fine blog entitled "Takeover Litigation in 2012" discussing Professors Davidoff & Cain's new paper showing litigation over deals continued at a high rate last year...

Here's a blog from Gregory Bader of Gunster about the re-rise of stock in deals...

The Dell saga is reaching another chapter. As noted in this DealBook blog, Blackstone has dropped out of the bidding (for which it will be reimbursed for conducting diligence, as I have blogged before). The DealBook blog includes the text of Blackstone's letter, which supports the special committee's argument that Dell's business is on the decline.

Here is a chart from The Conference Board providing stats on poison pills and fiduciary outs...

Gibson Dunn's Jim Moloney recently blogged:

The Division of Corporation Finance recently granted no-action relief to Alamos Gold, a Canadian corporation, in connection with its proposed acquisition of Aurizon Mines Ltd., another Canadian corporation. The proposed acquisition is structured as a tender offer with consideration consisting of a mix of stock and cash subject to proration that would limit each form of consideration to a specified maximum aggregate amount in both the initial and any subsequent offering period. The Division granted an exemption from Rule 14d-10(a)(2) under the Exchange Act, which provides that no bidder shall make a tender offer unless the consideration offered and paid to any security holder for its securities tendered is the highest consideration paid to any other security holder for its securities tendered. In addition, relief was granted from Rules 14d-11(b) and 14d-11(f) under the Exchange Act, which provide that a bidder may offer a mix of consideration in a subsequent offering period provided there is no ceiling on any form of consideration offered, and the same form and amount of consideration is offered in both the initial and subsequent offering periods.

The Staff's position in Alamos Gold is consistent with the no-action relief granted in prior Canadian cross-border transactions involving a mix of stock and cash consideration subject to aggregate maximums, including Barrick Gold Corporation (avail. January 19, 2006) and Teck Cominco Limited (avail. June 21, 2006).

This relief comes at a time when there is a noticeable increase in cross-border M&A activity and shareholder activism in Canada. In particular, Coeur d'Alene Mines' recent announcement of its CAD$350 million acquisition of Orko Silver Corp. and First Quantum Minerals' CAD$5.1 billion acquisition of Inmet Mining Corp. Thus, when structuring acquisition transactions in Canada, and elsewhere, bidders should consider the Division's increasingly flexible approach to allowing the offer of stock and cash alternatives in tender offers.

Cornerstone Research does a great job marketing its studies - and the latest M&A litigation one is no exception. Kevin LaCroix has read it and gives his analysis in this blog...

In this blog, Francis Pileggi provides a few notes from the 25th Tulane Corporate Law Institute - so does this "M&A Law Prof Blog." Here are three other pieces:

- Strine on M&A Litigation Settlements: 'Catfish Can't Get Much Lower'
- Delaware Supreme Court Judge Gives Strine Another Lash
- Citigroup Banker Says It's Too Early to Toast a Revival in M.&A.

We have posted the transcript of our recent webcast: "Growing Controversies Over Company Valuations Under Delaware Law."

Here's news from Greenberg Traurig's Cliff Neimeth: Legislative amendments have been introduced to the Delaware State Bar Association (Section on Corporation Laws) which, if adopted, could have a meaningful structural impact on two-step transactions (i.e., acquisitions effected pursuant to a first-step tender or exchange offer followed by a back end merger).

The proposed amendments (which would apply, on an opt-in basis only to target's listed on a national securities exchange or whose voting stock is held by more than 2,000 holders) would add a new provision to Section 251 of the Delaware General Corporation Law (i.e., subsection (h) ) to permit the consummation of a second-step merger (following completion of the front-end tender or exchange offer) if certain structural and disclosure conditions are satisfied. In other words, the need to seek and obtain stockholder approval for the merger would be eliminated even though the purchaser did not (whether directly in the initial tender offer period, as extended, or subsequently by means of exercising a "top up" option or using a Rule 14d-11 "subsequent offer period") acquire the 90% or more of the target's outstanding voting stock necessary to effect a "short-form" merger under Section 253 of the DGCL.

Specifically, a stockholder vote on the back end merger no longer would be necessary, so long as (i) the merger agreement expressly states that the second-step merger is being effected under (new) Section 251(h) of the DGCL and that the merger will be completed as promptly as practicable after consummation of the tender or exchange offer; (ii) the purchaser commences and completes, in accordance with the terms of the merger agreement, an "any and all" tender or exchange offer for such number of outstanding target shares that otherwise would be entitled to vote to approve the merger agreement and, in fact, owns such requisite percentage after consummation of the tender or exchange offer; (iii) the second-step merger consideration to be paid and paid for shares not cancelled in the merger or qualifying for dissenters' rights is the same as the front-end tender or exchange offer consideration; (iv) the corporation completing the tender offer, in fact, merges with the target, and (v) at the time the target's directors approve the merger agreement, no constituent party (aggregated with its affiliates and associates) is an "interested stockholder" (i.e., a holder of 15% or more of the target's outstanding stock) within the meaning of Section 203 of the DGCL (i.e., Delaware's three-year moratorium/business combination statute).

The proposed legislation, in part, reflects the recognition that over the past 10 years or so top-up options to reach the 90% ownership (short-form merger) threshhold are routine (except, of course, where the target lacks sufficient authorized and unissued capital stock "headroom" to effect the top-up exercise) - especially after the recent Olson v. EV3, In re Cogent and other decisions of the Delaware Court of Chancery completely validating the use of top-ups.

Proposed (new) Section 251 (h) of the DGCL would, if adopted, be an "opt-in" provision. If not used the parties, constituents to the merger agreement will simply continue to use top-up options (if available), "subsequent offer periods" under Rule 14d-11, the so-called Terremark-Verizon and Burger King dual track tender offer-merger proxy structures and other mechanisms that seek to expedite completion of a second-step statutory merger to take out minority holdouts (where a short-form merger is not otherwise available).

As you know, "entire fairness" review does not apply to a short-form merger effected pursuant to Section 253 of the DGCL. The decision to enter into a merger agreement (including one invoking, if adopted, new Section 251(h) and to declare it "advisable" and all other relevant common law fiduciary duties (care, loyalty, candor . . . ), considerations and determinations by the target's directors would not altered in any way by the proposed amendments.

This legislative development (much like the adoption of Regulation M-A back in 2000 and the SEC's amendment of the "all-holders/same price" Rules last decade) should lead to an increase in the use of the tender offer structure for negotiated acquisitions. This benefits both the target and the purchaser who share a common interest in selling and purchasing not just legal control, but 100% of the target's voting equity as quickly as possible. That said this also could put more heat on the tender offer disclosures and perhaps inadvertently incentivize strike suit plaintiffs' to more closely scrutinize the overall tender offer deal structure, conditions, compliance and disclosure because they won't have a back-end bite at the apple on a second-step transaction.

Appraisal rights under Section 262 of the DGCL will remain available for shares to be cashed out in the second-step merger and the timing of requisite notices, actions to perfect and the like, could be accelerated under certain circumstances.

Many notable developments happened while I was out last week, one of which is detailed in this article entitled "Dell paying Blackstone's bills." The gist is that Dell is reimbursing the Blackstone Group's due diligence costs on a possible buyout offer for the company.

Meanwhile, Prof. Bainbridge weighs in on this blog about the Dell saga - and Gunster's Gregory Bader blogs about how Dell shines a light on the risks of going private. And there is this DealBook piece about Dell's 275-page preliminary proxy statement...

This recent WSJ article bears reading:

Activist investors have been called raiders, distractions and dissidents. Now, they are getting a new label: "asset class." In recent years, this once-fringe investing approach has matured, with activists honing their techniques and seeking bigger corporate prey. In the process, an industry is growing up around them, with big investors pouring money into activist funds, researchers tracking the investors' moves and bankers jockeying for work defending companies against activists. Even giant Apple Inc. sought advice from Goldman Sachs Group Inc. when it came under fire this year from activist hedge-fund manager David Einhorn, who has been pushing the company to return more cash to shareholders, according to people familiar with the matter. Apple declined to comment but Chief Executive Tim Cook has said several times recently that the company is looking at ways to return cash to shareholders.

Activist investors snap up stakes in companies and press for changes such as a sale or stock buyback, often throwing public barbs in the process. Lately, activist William Ackman has been waging a campaign against nutritional-supplements company Herbalife Ltd., calling it a pyramid scheme, which the company denies. Meanwhile, Paul Singer's Elliott Management has pressed for change at oil producer Hess Corp., calling for the company to shed assets and split in two. Hess recently said it would seek to sell some businesses, but not because of Elliott's demands.

The old-style "corporate raiders"--investors such as Carl Icahn, Kirk Kerkorian and the late Saul Steinberg--were often reviled on Wall Street as self-interested agitators out to make a quick buck during the category's first heyday in the 1980s. By scooping up stock of undervalued companies, these investors used their power to unseat boards and forced firms to sell off assets or even go into bankruptcy--often giving an immediate boost to share prices.

After some big failures--and corporations developing countermeasures like so-called poison pills--activists accepted a lower profile, only to blossom again lately in a modified form. The new style of activism, with more emphasis on research, collaboration and a push for changes that investors argue make sense long term, is attracting a broader base of followers.

A rush of money came into these funds before falling off amid the financial crisis, and flows in the past two years are robust again. The $65.5 billion that U.S. activist funds had under management at the end of last year is the highest in a decade; in 2003, activist funds had $11.8 billion, according to data from HFR Inc., which tracks the hedge-fund industry. On average, HFR's activist index has performed more than three percentage points higher than its weighted composite index for all hedge funds for the past four years. "As long as activism can generate return above stocks in general and is seen as being analytically based and thoughtful, institutions are going to increasingly invest in activism as an asset class," said Gregg Feinstein, co-head of the mergers group at Houlihan Lokey, an investment bank that has recently ramped up its activist advisory practice.

Many activist investors produce extensive research papers that aim to illustrate how a company could boost returns. Sometimes they poll a company's shareholder base to assess how much support they would have before making a move. "On balance, activism has been good for corporations," Robert Kindler, mergers chief at Morgan Stanley, said at a conference last year.

Activists are also stalking bigger companies: Of the 241 activist campaigns aimed at boosting a company's financial returns or securing board seats last year, 21% targeted companies with market values of over $1 billion, according to FactSet SharkWatch. That is up from 7% in 2009.

Earlier this year, the California State Teachers Retirement System pension fund, the country's second-largest public pension fund, publicly supported activist Relational Investors LLC in urging Timken Co., a $5.6 billion industrial conglomerate, to separate its steel and bearings businesses. "If you team up with a company like Relational, they can...get a little more influence," said Anne Sheehan, director of corporate governance for the pension fund. Calstrs also invests with activist Nelson Peltz's Trian Fund Management LP, according to the pension fund. Timken has said it "carefully evaluated" input and continues to believe the company is better as a whole.

Not every activist campaign ends up a success. Mr. Ackman, for example, has seen the value of his stake in J.C. Penney Co. decline after he invested with much fanfare in 2010. And Mr. Kindler said in his remarks last year that companies remain wary of activists, noting that "it's frustrating when activists just get it wrong." As a result, bankers said, more companies are studying whether there are ways to improve their businesses before activists knock on their door. That has created a new opportunity for Wall Street banks. Winning a role on a company's defense effort against an activist can often lead to additional business, such as an advisory role if the company decides to spin off or sell an asset.

Goldman, which built the reputation of its advisory business partly by defending clients against hostile takeovers, was among the first banks to focus on advising companies on activist situations. Other banks, including J.P. Morgan Chase & Co. and Barclays PLC, have taken similar steps. The Barclays team focuses on larger corporate clients who expect their advisers to provide "advice and knowledge on who's across the table from them," said Daniel Kerstein, head of the bank's strategic finance group.

Chris Young, who was hired by Credit Suisse Group AG in 2010 to lead the bank's takeover-defense unit, says bankers in this role get access to senior executives because of the "existential" threat presented by activists. Credit Suisse several years ago set up a dedicated team to help banks with activists. "It's a great way to have a dialogue as a bank at that level," he said. "Competition is fierce."