Omnicare And The Negotiated Merger: Canada And Delaware Differ.
Mondaq Business Briefing › Nbr. 2004, May 2004
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Omnicare And The Negotiated Merger: Canada And Delaware Differ.
Sharon Geraghty is a partner and Corporate Department coordinator of the Toronto office of Torys LLP. Sharon gratefully acknowledges the assistance of Jim Turner, Andy Beck, Sunny Sodhi and Sue-Ann Fox in the preparation of this article.
A Delaware court recently concluded in Omnicare1 that the board of directors of a Delaware company cannot approve an irrevocable merger agreement, even if the merger is not available except on that basis. If a similar case had been before a Canadian court, the result would likely have been different. Nevertheless, I believe the case will have an impact on negotiated merger transactions in Canada as well as in Delaware and other U.S. jurisdictions. Omnicare and the Delaware Position The Omnicare case involved NCS, a health-care company in financial difficulty. After exploring strategic alternatives and negotiating unsuccessfully with Omnicare, NCS entered into a merger transaction with Genesis. The NCS board determined that the Genesis deal was the only reasonable alternative, and the holders of a majority of the NCS voting shares irr...See the full content of this document
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