Tender Offers and the New Streamlined Process for Deal Structuring

Description

Section 251(h)'s intent is to streamline the process for completing a short-form back-end merger if a buyer acquires a majority of the outstanding stock of a target corporation after a first-step tender offer, so long as specific requirements are met. This may lead to an increase in the use of the tender offer.

Section 251(h) may become the preferred structuring method by providing a timing advantage over one-step mergers while preserving deal certainty. This may be useful for private equity and other acquirers using debt financing, who desire faster access to the target company’s assets to obtain secured financing.

Counsel to acquirers must understand how to effectively evaluate whether and how to use Section 251(h) tools in M&A deal structuring.

Listen as our panel of deal attorneys describes the adoption of Section 251(h) and the impact it is likely to have on M&A deal structuring, explains the pros and cons of using the streamlined process in M&A deals, and discusses questions raised by the language of Section 251(h) that will likely be resolved by the Delaware courts in the future.