Abstract
The goal of this paper is to analyze whether the current law is sufficient to protect shareholders of a target company in a hostile acquisition. Particularly, this paper focuses on the effect of the current law in empowering the board of directors to veto a tender offer through methods such as a poison pill and a staggered board combination. This paper will start with a brief introduction on merger mechanics and the considerations certain parties in the merger must face. Following is an overview of Delaware case law in the area of mergers. The bulk of the paper discusses the various benefits accruing to management and shareholders in blocking mergers and the suitability of the current law in allowing mergers that increase shareholder wealth. Finally, the paper evaluates alternative methods of dealing with takeovers and will attempt to formulate a solution best suited for the interests of the shareholders.
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