Delaware Chancery Court Addresses Revlon Applicability in Cash/Stock Transactions
On May 20, 2011 Delaware Vice Chancellor Parsons issued an opinion in the case In re Smurfit-Stone Container Corp. Shareholder Litigation addressing an important open question in Delaware takeover law: what portion of the merger consideration in a takeover must consist of acquirer common stock in order for the transaction to be reviewed under the more deferential business judgment rule rather than heightened Revlon standards. In this case, the Chancery Court concluded that an acquisition involving 50% cash and 50% acquirer common stock was subject to Revlon standards, although it noted that this conclusion was “not free from doubt.”