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14 april, 2021
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Voting And Support Agreement

Since this provision has quickly become the linchpin of Delaware`s M-A, this contribution relates to a buyer`s ability under Delaware Law to obtain a final guarantee on two-tier mergers through assistance agreements with controlling target shareholders. As we have seen here, “support agreements” are agreements between a potential acquirer and controlling target shareholders for whom, when the contract is signed, these shareholders agree to exchange or tender to some or all of their shares as quickly as shortly after the start of the first tender or exchange offer. , thus ensuring that the buyer has essential, if not decisive, support from shareholders in favour of the merger. In fact, as in the run-up to Section 251 (h), a buyer must carefully structure such agreements to prevent a deal from becoming an inadmissible fait accompli, in accordance with the Delaware Supreme Court`s long-standing decision in Omnicare v. NCS Healthcare, with particular attention to the mechanisms for concluding an exchange or offer offer. [2] Although Omnicare has been the subject of much criticism from some practitioners and its applicability has been limited by subsequent cases, the Delaware case remains good with respect to its specific locking scenario and, for each two-stage merger in Delaware, the proposed assistance agreements must be prepared in a comprehensive deal structure. , different from some or three key errors identified in Omnicare. Finally, an agreement on the 22 controllers with support agreements subordinated the tender obligations of the control parties to the guarantee of financing the acquisition as the only obvious omnicare mechanism, in order to avoid the agreement being put on the fait accompli. Omnicare`s progeny supports the applicability of the case to a two-stage merger. For example, the Delaware Chancery Court in re OPENLANE, Inc.

Shareholders Litigation decision in 2011 confirmed a merger approved by the majority of the targeted shareholders the day after the signing of the merger agreement with written agreement and which did not contain an agent. The court upheld the merger, with shareholders free to sign written consent; The result was not predetermined; the objective was not prevented from submitting further bids, as the objective could terminate the merger contract if consent was not guaranteed within 24 hours.

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