When discussing mergers and acquisitions, most of the focus is given to whether the board of directors of the target company has a right of “self-defense” to stay independent. However, this thesis focuses on the other side of the transaction and seeks to determine whether the bidder in making a tender offer is acting unlawfully. Since a director has unlimited personal liability for a breach of his or her fiduciary duties, the question of whether a takeover-bid can be a breach of a director’s fiduciary duty is of great importance, yet little literature and no case law are devoted to the subject. The author addresses this issue by differentiating the duties of target-directors and bidder-directors during a takeover and by seeking to formulate a set of rules for bidder-directors to follow when making a tender offer. In developing these rules for bidder-directors, the business judgment rule and Smith v. Van Gorkom are considered.
Lowe, Henning Bernd C., "Fiduciary Duties of Bidder Directors in the Context of Tender Offers - Fair Play in a War" (1996). LLM Theses and Essays. 131.