Negotiating an acquisition can be an intensive process for both buyers and sellers. For both parties, deal certainty is important when the right transaction is on the table. However for the target, the key is striking the appropriate balance between achieving deal certainty and ensuring that its board of directors maintains the ability properly discharge its fiduciary duties if a superior proposal is received.
A force-the-vote provision is a clause that requires the target’s board of directors to submit the proposed transaction to a vote of its shareholders. The provision protects the transaction since forcing a shareholder vote prohibits the … Continue Reading