May 6, 2022
M&A Trends: 2022 Edition of Wachtell’s “Takeover Law and Practice”
Wachtell Lipton recently published the 2022 edition of its 245-page “Takeover Law and Practice” outline. The outline addresses directors’ fiduciary duties in the M&A context, key aspects of the deal-making process, deal protections and methods to enhance deal certainty, takeover preparedness, responding to hostile offers, structural alternatives and cross-border deals. It’s full of both high-level analysis and real-world examples. For example, check out this excerpt on unsolicited M&A:
The volume of unsolicited deals increased globally both in absolute terms, from $166 billion in 2020 to $421 billion in 2021, and in terms of share of overall deal volume, from 3% in 2020 to 7.5% in 2021. 2021 also saw an increase in the number of topping bids compared to 2020. As markets returned to normalcy after the early days of the COVID-19 pandemic, there arose greater opportunities for unsolicited acquirors to pursue targets that lagged behind their peers in recovering. At the same time, competition for targets intensified, as more potential acquirors entered the market, including a plethora of SPACs that have time limits on making acquisitions (as discussed in Section I.B.5), leading to more competition in some cases for certain targets.
As an example of competition in unsolicited M&A, both Cannae and Senator submitted a joint bid for Corelogic, which then adopted a poison pill and increased its stock buyback program in response. Ultimately, however, neither Cannae nor Senator was successful in acquiring Corelogic, who agreed to a deal with Stone Point at a higher price, showing that the competitive unsolicited deal environment can lead to deals with an acquiror other than the original unsolicited acquiror. Overall, it remains challenging to successfully complete an unsolicited acquisition, and a thoughtfully executed defense may in certain instances enable a target to retain its independence.
– John Jenkins