The latest development in the DExit debate is Coinbase’s announcement that it will reincorporate in Texas. Stockholder approval was already received by written consent, and the company filed a preliminary information statement on Wednesday. That same day, the WSJ ran an op-ed penned by Paul Grewal, Coinbase’s CLO, “Why Coinbase Is Leaving Delaware for Texas.”
Even just due to the company’s size and name recognition, this move is a notable one. I also thought it was interesting that one of the reasons given in the information statement is the nature of Coinbase’s business and how the State of Texas is approaching digital assets. I haven’t seen industry-specific factors like this commonly cited as a reason to reincorporate.
Texas’ Public Support for Blockchain and Crypto Innovation. The State of Texas has firmly established itself as a national leader in digital asset adoption—viewing crypto not as a niche experiment, but as a cornerstone of its economic future. With clear rules, a supportive pro-innovation government, and world-class energy and technology sectors, Texas has earned recognition as one of the most crypto-friendly states in the nation.
State lawmakers have enacted legislation formally recognizing digital assets under Texas commercial law, providing clarity and confidence for innovators and investors alike. Governor Greg Abbott and other state leaders have consistently demonstrated steadfast support for blockchain and cryptocurrency innovation. Most recently, Texas created a Strategic Bitcoin Reserve—one of the first-of-its-kind state-managed fund designed to hold Bitcoin and other eligible digital assets.
Texas is also home to a thriving blockchain ecosystem, including one of the largest concentrations of Bitcoin mining operations in the world. Industry leaders and advocacy organizations continue to work closely with policymakers to ensure Texas remains at the forefront of forward-looking crypto policy and sustainable innovation.
Preemption rights — provisions in cooperative agreements that give one party the option to buy the other’s interest before it can be sold to a third party — often give rise to disputes. This Debevoise alert cites Chevron’s acquisition of Hess as an example of a parent-level transaction delayed by over a year because of a dispute regarding preemption rights contained in the joint operating agreement of a significant asset. Given the risk of unintended consequences, the alert provides practical tips for drafting preemption rights that work as intended — including to prevent them from “interfering with large-scale transactions, parent-level M&A or IPOs.” The first tip is an existential one:
Weigh the costs and benefits of including a preemption right in the first place. Parties should bear in mind that preemption right provisions are reciprocal and have inherent costs to all parties involved. In particular, because preemption rights can restrict the transfer or sale of a given asset, they can impact not only its marketability but that of the associated businesses. At the same time, preemption rights have discrete benefits, most notably in affording joint venture partners some control over their collaboration partners.
When included, it recommends that the provision be very clear about:
– when the preemption right is triggered, including precise definitions of “transfer” and “change in control”;
– the types of transactions, if any, that are carved out from its scope;
– what happens if the preemption right is triggered, including how the stake would be valued, the timeline for exercising the right and other procedural steps; and
– a clear and efficient dispute resolution mechanism in case there is a disagreement.
It also says you need to anticipate the impact on certain transactions, especially ones at the parent level:
An asset-level preemption clause can complicate larger deals up the chain of ownership if it is not properly limited. For example, parties may wish to exempt transactions where the asset in question represents only a small percentage of the value of the overall transaction. Parties might also consider bespoke carve-outs that contemplate a specific future transaction. For example, parties sometimes choose to carve out IPOs or ultimate parent level transactions from the preemption right, so that a company can go public or undertake a corporate merger without triggering preemption rights across its portfolio of agreements at the asset level.
A few years ago, John shared a blog by Glenn West on choice-of-law and choice-of-forum provisions in which Glenn noted that, “a properly-worded choice-of-law clause can, in most instances, ensure that the contractually chosen law” will be applied to two kinds of “contractually-related disputes” — “traditional breach of contract claims, as well as tort-based claims such as fraud and negligent misrepresentation.” Earlier this week, in Cytotheryx Inc v. Castle Creek Biosciences Inc. & Paragon Biosciences LLC (Del. Ch.; 11/25), the Delaware Chancery Court easily concluded that a broad choice-of-law clause contained in a merger agreement did indeed apply to tort claims, but had to look a bit closer at whether the choice-of-law provision covered the particular tort claims at issue.
The Merger Agreement’s choice-of-law provision provides that Delaware law will apply to “all claims and causes of action based upon, arising out of or in connection []with” the Merger Agreement. That language—particularly “arising out of” and “in connection []with”—is “paradigmatically broad.” Indeed, the question of whether a choice-of-law provision applies to torts has turned on whether the contract contained similar language. When the contract does not, Delaware courts have held the provision does not apply. The implication, borne out by though not always explicitly stated in the case law, is that when a choice-of-law provision does contain this broad language, it does cover tort claims. Here, the Court holds that the Merger Agreement’s choice-of-law provision is broad enough to cover at least some tort claims.
The tort at issue in the case was not fraud or negligent misrepresentation (or fraudulent inducement, which Sitting Vice Chancellor Winston gave as an example of a tort that “necessarily arises out of a contract”), but defamation. Plaintiffs contend that “extending the choice-of-law clause to defamation claims is a bridge too far.” Sitting Vice Chancellor Winston found that a defamation claim does not “necessarily” but “possibly” arises out of a contract.
She found that the claims at issue in the dispute were encompassed by the merger agreement’s broad choice-of-law provision since they concerned statements related to performance of the merger agreement — specifically about contractual obligations, “misrepresentations” during the “acquisition process” and “refus[ing] to provide payment.” But she notes: “Had Cytotheryx and Swart made statements about some other topic, the result might be different.”
“In a market in which attractive assets draw fierce competition, smart buyers are finding ways to stand out through value creation rather than higher prices.” This Goodwin alert focuses on creative strategies that can position a buyer for success “without inflating headline prices or up-front equity requirements” at a time when competition among prospective acquirers is particularly intense.
One way buyers can do that is by viewing the transaction — and the tax implications in particular — through the sellers’ eyes.
In founder-backed businesses and lower middle-market deals, significant asymmetries may exist between the buyer’s and seller’s tax structuring sophistication. Rather than leaving sellers to navigate these complexities alone, successful acquirers engage experienced advisers and apply creative thinking to maximize a seller’s value.
Here are some specific examples:
The QSBS Opportunity: For US corporate business, qualified small business stock (QSBS) represents particularly fertile ground for value creation. Sellers may unknowingly hold QSBS without understanding its potential benefits. . . . Buyers that demonstrate creativity and flexibility around QSBS, as compared to competitors presenting “take it or leave it” structures, can build goodwill that extends far beyond “found money” for sellers. Investing resources in understanding a seller’s unique tax position signals a buyer’s commitment to partnership that helps earn a seller’s trust.
Additional Tax-Driven Differentiators. Beyond QSBS, several approaches can distinguish buyers:
– Partnership structures enabling go-forward equity incentives treated as profits interests rather than stock options, providing capital gains treatment on incentive equity to sellers who continue with the business
– Flexibility on pre-closing taxes, including seeking and transferring pre-closing income tax refunds as and when received or pursuing expedited refunds (so called “quickie” refunds) for estimated tax overpayments for the current taxable year
– Holistic seller needs assessment, addressing charitable giving goals or estate planning requirements through meaningful engagement with sellers’ advisers
In a follow-up to this piece, Goodwin explains how buyers can also better position themselves by demonstrating that they’re “the right next owner and partner for sellers.”
Programming note: In observance of Veterans Day, we will not be publishing a blog tomorrow. We will be back on Wednesday.
This recent Weil article (p. 6) reviews Northern Data AG v. Riot Platforms, (Del. Ch.; 6/25), a recent Delaware Chancery Court’s decision sorting out various purchase price adjustment disputes, and uses that case to develop a list of best practices to avoid these disputes. This excerpt lays out some of those best practices:
– Process, process and process again. Work closely with accountants and financial advisors at all times throughout purchase agreement negotiation and drafting. Align in advance on process timeline, especially in fast-moving transactions, to permit advisors time to review drafts of the relevant provisions.
– A detailed model of the EV-to-equity bridge is key. Some definitional components of a purchase
price calculation may leave room for interpretation – a detailed model forces deal teams and financial advisors to wrestle with the language in the contract leading to a better process.
– If the parties differ in level of sophistication, consider including a detailed sample calculation marrying each line item to its purchase price definition as an exhibit to the purchase agreement. But be clear about whether the exhibit is binding or included for illustrative purposes only.
The article also recommends paying close attention to how accounting metrics used to calculate and adjust final purchase price are defined and considering a cap on purchase price adjustments – particularly in situations where varying interpretations of accounting concepts could result in significant swings in the amount an adjustment.
This recent article from Nasdaq’s Center for Board Excellence discusses the insights provided by a panel of experts on shareholder activism during a recent webcast on post-proxy season trends in activism. Panelists included Avinash Mehrotra, Co-Head of Americas M&A and Global Head of Activism & Raid Defense, Goldman Sachs; Marc Goldstein, Head of U.S. Research, Institutional Shareholder Services (ISS); Lori Keith, Board Member, e.l.f. Beauty, Portfolio Manager & Director of Research, Parnassus Investments; and Gabriella Halasz-Clarke, Head of Governance and Sustainability Solutions, Nasdaq.
One of the topics addressed by the panel was how to navigate common activist demands. This excerpt from the article summarizes their advice:
To stay ahead of potential interventions, boards should be able to anticipate activist demands and prepare strategic responses. Three common areas of activist focus include:
1. Return of Capital
Activist Demand: Activists may argue that a company is hoarding cash and that the excess should be returned to shareholders via increased dividends or share buyback programs.
Board Strategy: Regularly review cash management strategies to ensure they align with short-term and long-term objectives. Clearly communicate capital allocation rationale to shareholders to preempt misconceptions or activist criticisms.
2. Business Simplification
Activist Demand: Activists may claim that a company with multiple lines of business lacks strategic focus and efficiency. They often push for restructuring or divestiture of non-core assets.
Board Strategy: Thoroughly evaluate business units for strategic fit and performance. Consider divestiture where appropriate to streamline operations and unlock value.
3. M&A Activity
Activist Demand: Activists scrutinize M&A strategies—especially if execution falters.
Board Strategy: Continuously assess market dynamics to identify opportunities and threats. Articulate to shareholders how M&A aligns with corporate strategy.
The article says that including these topics into the ongoing boardroom dialogue will permit directors to provide swift and strategic responses to activist initiatives that aligned with the board’s long-term vision.
According to Dykema’s “2025 Mergers & Acquisitions Outlook Survey,” dealmakers are fairly upbeat about the prospects for increased M&A activity during the upcoming year. Here are some of the findings:
– When asked whether they expect their company or one of their portfolio companies to be involved in a deal over the next 12 months, the majority of respondents said yes. Acquisitions led the way, with (69%) anticipating activity, followed by joint ventures at (52%), and sales at (50%). These figures reflect a notable uptick from 2024, when (61%) expected acquisitions, (47%) anticipated joint ventures, and (46%) projected sales.
– There’s still plenty of economic uncertainty out there, with respondents citing general economic conditions (42%) and financial market conditions (32%) as the top two factors posing obstacles to deal activity in the next year. Tariffs emerged as a significantly greater concern in 2025, with 30% of respondents identifying them as a key obstacle to dealmaking—up sharply from just 8% in 2024. Company valuations (29%) and availability of quality targets (22%) are also key factors.
– In response to macroeconomic conditions, respondents report shifting their M&A strategy to focus on strategic acquisitions and to mitigate economic uncertainty and the impact of tariffs. When we asked survey participants how their approach to dealmaking has evolved this year, their open-ended responses revealed a clear theme: caution, selectivity, and adaptability.
– 83% of respondents believe PE investors will boost deal volume in the coming year, and 76% expect due diligence to remain a top priority.
– A majority of respondents expect to work on deals involving ESG risk screening in the next year, highlighting its growing role in M&A strategy. Meanwhile, 62% anticipate increased use of R&W insurance, though most expect only a modest rise. Just 4% foresee any decrease in usage.
The survey was conducted in August and September 2025 and contains insights from 216 M&A professionals, including executives, attorneys, bankers, and private equity leaders.
Last week, the Chancery Court issued its post-trial opinion in Camaisa v. Pharmaceutical Research Associates, (Del. Ch.; 10/25), which involved fraud claims arising out of alleged oral statements made by a buyer’s representative concerning the autonomy of an acquired business. When the business subsequently failed to achieve contractual earnout milestones, the plaintiff sued, raising the alleged oral statements in support of fraudulent inducement allegations.
Vice Chancellor Cook was unimpressed. In light of explicit contractual language giving the buyer broad discretion to run the business as it saw fit, the parties post-closing conduct and other evidence impugning the credibility of the allegations, he ruled in favor of the defendants. However, the key takeaway from the opinion was the consequences of the failure to include anti-reliance language in a merger agreement, which converted a case that could have been resolved at the pleading stage into one requiring a full-blown trial.
The Vice Chancellor pointed out that the merger agreement not only didn’t include an anti-reliance clause, but that Section 6.13 of the agreement provided that “[n]otwithstanding anything to the contrary contained in this Agreement, none of the provisions set forth in this Agreement shall be deemed a waiver or other limitation by any Party of any right or remedy which such Party may have at Law or in equity against a Person based on any fraud.” In concluding his opinion, Vice Chancellor Cook pointed out the significant consequences of that choice of language:
This case presents a pointed example of why it is important for transactional parties to draft contractual language concerning fraud carefully. The parties here failed to include an anti-reliance clause in the Agreement. Instead, they bargained for an unusual provision, Section 6.13, which expressly disclaims waiver or “other limitation” of “any fraud” claim “[n]otwithstanding anything to the contrary contained” in the Agreement, including Sections 2.7(h) and 6.6.
When drafters include phrases like “notwithstanding anything to the contrary,” they should perhaps do so with pause and certainly in full awareness of such phrases’ powerful effect. Here, a fraud claim that could otherwise have been resolved at the pleading stage with a handful of drafting changes became something else entirely.
It’s been a long time since we’ve seen a deal jumping attempt as brazen – or as high stakes – as the one that Novo Nordisk is trying to pull off with the pending deal between Pfizer and Metsera. The first thing that’s pretty wild about Novo Nordisk’s move is the structure of its proposal. Here’s an excerpt from Metsera’s 8-K filing describing the terms of Novo Nordisk’s proposed deal:
The Novo Nordisk Proposal is structured in two steps (together, the “Novo Nordisk Transaction”). In the first step, promptly following the signing of the Novo Transaction Agreements (as defined below), a Novo Nordisk subsidiary would pay to Metsera an amount equal to $56.50 per Metsera common share in cash as well as certain amounts in respect of Metsera employee equity and transaction expenses. In exchange, Metsera would issue Novo Nordisk shares of non-voting convertible preferred stock (the “Non-Voting Convertible Preferred Stock”) representing, in the aggregate, 50% of Metsera’s fully-diluted share capital on a post issuance basis. On the same day, Metsera would declare a dividend of $56.50 per Metsera common share, in cash, with a record date ten days following the signing of the Novo Merger Agreement with payment to follow in the days shortly thereafter.
In the second step, which would happen only after receiving approval from Metsera shareholders and relevant regulators as well as the satisfaction of other customary conditions, holders of Metsera common stock and certain employee equity awards would receive one contingent value right (“CVR”) per Metsera common share, subject to certain exceptions, representing the right to receive up to $21.25 in cash based on the achievement of certain development and regulatory approval milestones as described further below (which are substantially the same as those that would be issued in connection with the Pfizer Merger Agreement), and Novo Nordisk would acquire the remainder of the outstanding shares of Metsera via a merger of Metsera with and into a subsidiary of Novo Nordisk.
That non-voting preferred stock would be convertible into common stock to the extent permitted by law, and would rank on a par with Metsera’s common stock on an as-converted basis when it comes to dividends and liquidation rights. In addition, the preferred would convert into common in connection with any transfer of the shares to a non-affiliate of Novo Nordisk.
There are restrictions on transfer of the preferred stock to non-affiliates prior to termination of a merger agreement between Metsera and Novo Nordisk. Those restrictions lapse over a two-year period following such termination. The preferred stock also has the right to force a redemption during the three-year period following termination of the merger agreement in connection with a topping bid or a subsequent acquisition transaction.
Not surprisingly, Pfizer is crapping all over Novo Nordisk’s bid. Here’s an excerpt from its press release responding to the proposal:
Pfizer Inc. (NYSE: PFE) is aware of the reckless and unprecedented proposal by Novo Nordisk A/S (NYSE: NVO) to acquire Metsera, Inc. (NASDAQ: MTSR). It is an attempt by a company with a dominant market position to suppress competition in violation of law by taking over an emerging American challenger. It is also structured in a way to circumvent antitrust laws and carries substantial regulatory and executional risk. The proposal is illusory and cannot qualify as a superior proposal under Pfizer’s agreement with Metsera, and Pfizer is prepared to pursue all legal avenues to enforce its rights under its agreement.
On Friday, Pfizer put its money where its mouth is and filed a lawsuit against Metsera, its board, and Novo Nordisk alleging breaches of the merger agreement and tortious interference.
Metsera’s board apparently disagrees with Pfizer’s assessment and has informed Pfizer that it believes Novo Nordisk’s bid represents a “Superior Company Proposal” under the terms of its merger agreement. Your mileage may vary on the competing assessments of whether Novo Nordisk has submitted a Superior Company Proposal, but if you’re interested, that term is defined in Section 5.02(h) of the merger agreement. Here’s the WSJ’s take on the Superior Company Proposal issue, which notes that Metsera previously rejected a similarly structured proposal from Novo Nordisk:
If Novo’s bid is truly superior, why didn’t Metsera accept a similar one the first time? Why did the Metsera board, as the proxy statement shows, prod Pfizer to sweeten its deal? Under the merger agreement, the definition of “Superior Company Proposal” refers to a weighing of not just price but also regulatory, financing, timing, and legal risks. While shareholders might get more money under Novo’s proposal, Pfizer’s argument that Metsera can’t pay out the dividend under Delaware law and Pfizer’s request for a temporary restraining order to block the merger’s termination already have made Novo’s offer, in essence, riskier.
Pfizer’s press release also pushed all the buttons necessary to attract the attention of antitrust regulators, and its argument that Novo Nordisk has structured its bid to “circumvent antitrust laws” has received some attention from Ann Lipton in a LinkedIn post. There, she points out that Toshiba and Canon got into antitrust trouble a few years ago by using a non-voting preferred stock deal structure to, according to the FTC & DOJ, evade HSR filing requirements.
Section 5.02(e) of the merger agreement gives Pfizer match rights during the four-day period following receipt of notice from Metsera that a Superior Company Proposal has been received, and with Pfizer already throwing punches, it looks like there are going to be several more twists and turns to this transaction before the dust settles. So, sit back and make some popcorn – but since this fight is all about obesity drugs, maybe use the air popper & leave out the butter.
Earlier this month, Boston Consulting Group released its 2025 M&A Report in four parts. Chapter 3 addresses uncertainty. While often considered the “enemy of dealmaking,” the report shows that the impact of uncertainty on deal volume is more nuanced than that.
In turbulent times, average deal values plunge dramatically—down more than 34%, from $280 million to $186 million. This reflects caution amid an uncertain outlook, as few CEOs dare to embark on a headline-making deal when dark clouds are on the horizon.
Conversely, overall deal volume jumps by 27%, fueled primarily by a 70% surge in smaller transactions (less than $50 million). Adopting this “string-of-pearls” strategy of multiple small deals allows executives to deploy capital with reduced exposure.
Sector differences are pronounced. Cyclical sectors such as materials and technology see marked increases in deal activity as companies consolidate to manage volatility and seize opportunities, whereas more stable industries such as health care and consumer experience minimal change.
As uncertainty rises, deal makers prioritize risk avoidance over strategic diversification. Large and midsize cross-border and cross-industry deals plummet by 31% and 70%, respectively, while domestic, same-industry acquisitions surge by nearly 200%.
Wow! The magnitude of the shift in that last statistic surprised me. Also, take a look at Exhibit 4 of the report, which addresses strategic archetypes that are more or less effective in an uncertain environment.
On an unrelated note, as my kids start to age out of trick-or-treating excitement (too soon!), I shared my thanks to Dave on TheCorporateCounsel.net blog this morning for his reflection on Halloween last year. If you will be celebrating tonight, Happy Halloween! May the weather be good and the candy be your favorite.