Merger and acquisition deals litigation is a common reality in the business world. Many types of businesses face this type of litigation at some point if they combine or transfer ownership with another company.
Some examples of types of businesses that often have merger and acquisition deals include the medical device industry, the healthcare field, the oil and gas companies, the financial services field, and the software and technology companies.
Merger and acquisition deals litigation attorneys assist clients with all stages of corporate transactions. When two or more business entities or corporations combine or are transferred, oftentimes, disputes arise that require at minimum negotiation, but usually litigation.
These are 5 common types of merger and acquisition litigation:
Contested acquisitions - Sometimes businesses face contested acquisitions. For example a target company's board may not want a takeover to occur and may recommend to their stockholders that they fight the acquisition.
Poison pill cases or shareholder rights plans - This is a plan many corporations' boards of directors have in place to avoid takeovers. If one shareholder tries to buy more than a certain percentage of a corporation's shares, usually there's a plan in place to give the other shareholders the right to buy corporate shares at a lower price and thus diluting the first shareholder's stake.
Public tender offers - Tender offers are public invitations that an acquirer makes to a public corporations' shareholders to tender these shareholder's stocks for sale. They usually offer more than the stock is worth in order to induce them to sell, along with other conditions such as a specific time, or an agreement that a certain amount of shares sell.
Material adverse change - Material adverse change is a contingency clause in merger and acquisition contracts that basically allows the acquirer to refuse the merger and acquisition or financing if target that's being transferred or combined suffers change. Mergers and acquisitions are a very long, drawn out process, and this clause protects acquirers if the event that some big material change (as defined in the contract) occurred.
Securities fraud claims - This is a type of practice that often occurs in the stock market where fraudulent schemes are used to prey on investors by getting them to either buy or sell based on false and deceptive information.