Specifically, the court found no evidence that the early involvement of the controlling shareholder, or the lack of independent counsel to the special committee, tainted the process, noting that the special committee was comprised of independent directors and that conflicted board members were excluded from decision making. There was no evidence that company counsel suffered from a conflict vis-à-vis the controlling shareholder, despite the latter’s effective control over the target. The court also rejected the argument that the late engagement of the financial adviser was fatal, observing that the special committee did not bind the target to a price until after the committee received the adviser’s fairness opinion and formal valuation (which concluded that the offer was within the fair market value range). The court summarily addressed the issues surrounding the unsolicited third-party offer and did not raise any substantive concerns regarding the alleged lack of disclosure. The court also held that the lack of an auction or “go- shop” provision in the acquisition agreement did not render the transaction unfair for a number of reasons, including (i) a “sizeable body of credible evidence” available to the directors that indicated the price was fair; (ii) the unique nature of the target’s assets; and (iii) the existence of a right of first offer in respect of substantially all of the target’s assets. The court also dismissed the dissident shareholder’s complaints regarding the VSAs, concluding that they “did not limit the choice of Minority Shareholders to vote against the Arrangement” and noting that minority shareholders could exercise dissent rights to obtain fair value for their shares.
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Governance Insights 2025
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