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.
The latest M&A outlook from Goldman Sachs (available for download) highlights a push toward simplification. Investors reward companies for moving away from a conglomerate model and toward a more narrow geographic focus — and corporates and activists are taking note.
Corporate simplifications continue to fuel M&A as companies look to highlight undervalued assets, separate divergent businesses, and sharpen geographic focus. Large-cap companies ($25B+) moving away from conglomerate models are especially active—representing ~40% of announced and closed spin-offs in 2024.
This trend is driven by:
– The operational complexities of managing corporate assets across multiple regions
– Rising geopolitical tensions
– Evolving market appetites created by the changing pace of energy transition
– A focus on optimizing capital allocation
– Valuation discrepancies that are encouraging corporates to seek more favorable capital markets through new domiciles, listings, or headquarters
So, “corporates are pursuing regional separations to unlock valuation, target specific investor bases, and achieve greater strategic clarity in a shifting global landscape.” The activity is also supported by these trends:
Sponsors are becoming key to simplification by acting as carve-out partners while cost of capital continues challenging returns, and by giving both valuable expertise and credibility to corporates’ transactions.
Creative deal structures are enabling more activity; earnout provisions, collars, and equity rollovers offer innovative solutions tailored to the specific needs of each company.
Activism is accelerating spin-offs, but spin-offs are also accelerating activism amid a newfound focus on SpinCos—underscoring the importance of governance and adequate capitalization for newly spun-off companies.
On Monday, in a memorandum opinion in Wright v. Farello et al.(Del. Ch.; 10/25), Chancellor McCormick dismissed claims that an advance-notice bylaw was facially invalid. While the bylaw at issue was “long, broad, and overly complicated,” a stockholder could comprehend it, even if doing so took “a good bit of work.”
Defendants first argued that the plaintiff’s challenge was not ripe, citing the Chancery Court’s April decision in Siegel v. Morse because “Plaintiff does not—and cannot—allege that he or any other stockholder attempted to nominate a director and does not allege that any such effort was rejected by the Board.” Chancellor McCormick distinguished that case since Siegel disclaimed a facial validity challenge. She said Delaware’s approach leaves the determination to the courts and concluded that it was appropriate to resolve this matter on the merits.
A facial challenge presents a pure question of law, the material facts are static, and there is thus no need to postpone resolution to allow for the question to arise in a more concrete form. For that reason, Delaware courts routinely resolve facial challenges without undertaking ripeness analyses.
Plaintiff argued that the bylaw is unintelligible and that complying with it is impossible. While Chancellor McCormick said, “the Acting-in-Concert Provision is a sea of subparts, which take a bit of effort to comprehend,” and spent seven pages discussing its requirements before diving into the facial invalidity analysis, she ultimately disagreed with the plaintiff.
“[U]nintelligible” means that the words are incomprehensible. That is, a person cannot comprehend their meaning. Kellner captures the commonsense understanding that sometimes a complicated provision is so convoluted as to make zero sense. When a rule crosses the line from hard-to-understand to unintelligible, then no one will know how to apply it. At that point, the rule “cannot operate lawfully under any set of circumstances” because it cannot operate at all.
The Bylaw is a lot to take in. Parts of it are quite broad. And others are confusing. But does it cross the line to unintelligible? . . . [A] provision’s breadth does not necessarily render it unintelligible. Broad in this context means “extending far and wide.” That is not the same as incomprehensible. Parts A through C are broad because they cover an expansive set of conduct. But (with a good bit of work) a stockholder can comprehend them.
Plaintiff also criticized the daisy chain provision for requiring nominating stockholders to disclose persons unknown to them. To this, Chancellor McCormick said:
[W]hat the Bylaw effectively does is impose on any Proposing Person the obligation to ask the people with whom she is Acting in Concert whether they are acting in concert with anyone else. In this way, the Bylaw imposes an investigative burden on the Proposing Person.
A stockholder might rightly take issue with that requirement as burdensome to the point of unreasonable. But where a party brings a facial challenge to a bylaw, the court does not assess reasonableness—that analysis is reserved for as-applied challenges. The investigative burden imposed by the Bylaw is onerous. But it does not render the Bylaw unintelligible.
This provision was also not impossible to comply with — it just required some investigation.
This HLS blog post from John Johnston of Vinson & Elkins and Christine O’Brien of Edelman Smithfield asks — and answers with examples — how boards know when settling with an activist is unlikely to be the right outcome and a proxy fight is necessary. Here are some scenarios they highlight:
– When the board believes the demands are unreasonable — for example, board composition changes that mean disproportionate influence for the activist, reduced independence or fewer key skillsets represented on the board
– When the board believes the outcome proposed by the activist is not in the best interest of shareholders — for example, when the activist is seeking a publicly disclosed sale process or strategic review, but the company has already privately tested the waters and the board believes a public process would destroy value
– When the activist seeks removal of a CEO and that CEO has full support of the board and no near-term viable successor
– When an activist insists that a member of their team join the board but the board expects this would materially disrupt board dynamics and vision
To avoid rushing to settle with a suboptimal outcome, the blog suggests that, before negotiations, a board may want to:
– Define clear non‑negotiables
– Align on what it will and will not accept
– Honestly assess their position
– Evaluate their relative strength
That includes taking into account TSR and financial results against peers, investor sentiment, analyst views, and management’s credibility on long-term strategy to assess what is in the best interests of the corporation.
As John has shared on TheCorporateCounsel.net, Prof. Ben Edwards has been tracking the status of all 2025 public company Nevada reincorporation proposals. In addition to his tabular scorecard, he’s also been highlighting stated rationales. For the four latest nano-cap companies, cost has been disclosed as a material factor.
His latest blog also addresses some common issues he’s seen from reviewing disclosures by the now 25 companies that have sought to reincorporate to Nevada. The issues largely stem from the fact that various versions of the Nevada Revised Statutes are incomplete or not up to date. Here are his tips for counsel drafting filings related to Nevada reincorporations:
– Nevada’s statute online is out of date. You can access the Nevada Revised Statutes online, but you shouldn’t trust them until they’re updated. The 2025 revisions to the Nevada statute went into effect on May 30, 2025 upon Governor Lombardo’s signature. Westlaw has updated its version of the Nevada Revised Statutes. As of today, LexisNexis has not yet updated and is just as out of date as the Nevada website.
– The Nevada statute exempts public companies from stockholder inspection actions so long as they keep making their securities filings. The 15% threshold is for private companies.
– The Nevada statute does define controlling stockholders. It’s NRS 78.240. It provides that a controlling stockholder is “a stockholder of a corporation having the voting power, by virtue of such stockholder’s relative beneficial ownership of shares or otherwise pursuant to the articles of incorporation, to elect at least a majority of the corporation’s directors.” The statutory duty “is to refrain from exerting undue influence over any director or officer of the corporation with the purpose and proximate effect of inducing a breach of fiduciary duty by such director or officer.” You will not currently find this on the Nevada website or LexisNexis. You should pull it up on Westlaw or use the legislative materials.
These disclosure issues have caused him to “develop concerns that not every firm reincorporating to Nevada has consulted with a Nevada lawyer about Nevada law.”
EY recently published its monthly report on M&A activity, and had a lot of positive things to say about the current deal environment. Here are some of the highlights:
– September 2025 saw overall deal value soar, driven by several high-value transactions, with private equity (PE) continuing to play a leading role. Deal value jumped 109.7% in the month compared with a year earlier, while M&A activity increased 41% in volume compared to the same period.
– Overall, mega deals (US$5b+) increased by 176.4% in value and 80% in volume compared to September 2024. The US led the market, representing about 72% of global deal value in September.
– The surge in mega deals during September set the stage for a record-breaking Q3 2025, which emerged as the most active period for M&A this year. Compared to Q3 2024, total deal value rose by 238.7% and deal volume increased by 163.6% for deals valued US$5b+, underscoring heightened investor confidence and a strong appetite for large-scale strategic transactions.
– PE was a major force behind the increase in US deal activity in the month, fueling both M&A and initial public offerings.
The report says that deal momentum moving into the fourth quarter remains strong. It cites a significant backlog of deals poised to move forward if market conditions continue to stabilize, and says that 48% of CEOs globally plan to pursue more deals. So, what could throw the proverbial turd in the year-end dealmaking punchbowl? The report cites unstable tariffs, new investigations and the federal government shutdown.
This Torys memo notes that the size of sponsor commitments has grown significantly in recent years in response to limited partners’ desire to see general partners have more skin in the game. The memo discusses the various strategies sponsors are using to fund these commitments. This excerpt discusses alternatives available to emerging fund sponsors:
Early-stage managers often lack the personal liquidity or track record to borrow against future management fees or carry. As such, emerging managers tend to use creative internal solutions:
– Employee participation. Founders may spread the GP commitment across a broader team, requiring managing directors, principals or even senior associates to contribute. This builds alignment internally while easing the burden on any one individual. Some sponsors may tie an employee’s carry allocation to the size of their contribution to the GP commitment.
– Revenue-based loans or personal guarantees. In some cases, principals borrow personally using commercial loans backed by expected fee income or other collateral, though this comes with risk.
The memo also discusses financing alternatives available to mid-sized and established sponsors, and the considerations and trade-offs associated with those alternatives. It also offers some thoughts on how financing alternatives for sponsor commitments are likely to evolve.
“Withhold” campaigns in which in lieu of launching a proxy contest, an activist publicly urges shareholders to withhold votes from a director or to vote no on a particular proposal are becoming increasingly popular. This recent Cooley blog discusses this strategy and its implications for corporate boards:
The year’s stealth disruptor is the low-cost “vote no” campaign. As Cooley partner Bill Roegge explained, “Instead of an activist running a competing slate, … they just go out and publicly say ‘don’t support the company’s directors.’” For companies with director resignation policies (i.e., policies stating that if a director receives less than a majority vote at an annual meeting, that director will tender their resignation to the board), significant withhold tallies can force resignations – or create public relations (PR) and governance crises if boards decline resignations from affected directors, often laying the groundwork for subsequent campaigns by the activist.
– 2025 examples: While Harley-Davidson (activist: H Partners) narrowly avoided failed elections amid a full-throated PR battle, its CEO (who was a target of the campaign) later stepped down from the role. Forward Air (activist: Ancora) saw one director fail and two barely clear a majority, with all three ultimately resigning. At WEX (activist: Impactive Capital), a single press release drove razor-thin margins for several incumbents.
– Why they work: As Collected Strategies’ Jim Golden put it, withhold campaigns drive “a true PR narrative campaign,” cheaper than a slate and potent when activists have lined up sympathetic institutions. Even activist losses can be costly for issuers. “While [the activist] didn’t win,” Golden noted of Harley-Davidson, “the CEO ended up having to resign because of the vote results.”
The blog also points out that withhold campaigns also illustrate that “activism season” is a dated concept, because these campaigns “extend the threat beyond nomination windows and keep the pressure on boards to engage early.
This Wachtell memo discusses ten trends in shareholder activism to keep an eye on for the upcoming year. Here’s what the memo has to say about M&A-focused activism:
M&A remains a persistent theme of activism. The returns from operational improvements are generally less attractive to activists than the prospect of an immediate transaction premium. Over the last few years, however, a challenging regulatory and macroeconomic environment limited activists’ ability to credibly push for full-company sales or strategic carve-outs. With the significant M&A rebound in 2025, we expect activists to increase their focus on event-driven M&A outcomes. While pushing for full-company sales will remain a key objective for many activist campaigns, we also expect to continue to see activists arguing for break-ups that purportedly shed underperforming divisions or capitalize on trading multiple arbitrage for different businesses.
The memo suggests that companies that want to consider potentially transformative M&A in a more deliberate fashion may consider establishing a strategic review committee that includes one or more activist-nominated directors. It stresses that while such a committee may make sense in particular situations, deciding whether to sell or break up the company should remain a full board decision, and the committee’s authority should be appropriately limited.