The Delaware Court of Chancery, in In re Towers Watson & Co. Stockholders Litigation, C.A. No. 2018-0132-KSJM (consol.), memo. op. (Del. Ch. July 25, 2019), dismissed claims challenging a “merger of equals” transaction for cash and stock, where the CEO of the acquired company negotiated his post-merger employment but also negotiated a 100% increase in the cash component of the merger consideration, rejecting plaintiff’s arguments that he negotiated only the minimum increase needed to obtain approval of the merger, and that the board abdicated its obligation to oversee his conduct during the period between the merger announcement and closing.
K&L Gates discusses the decision in Undisclosed Post-Merger Compensation Plan for CEO Also Serving as Lead Merger Negotiator Found Insufficient to Rebut Business Judgment Rule and Insufficient to Show Board Acted in Bad Faith.