M&A Bootcamp booklet - Flipbook - Page 34
G.
1.
Recipient should be required to give prompt notice to disclosing party so
that disclosing party may seek protective order or other remedy
2.
Recipient should be permitted to disclose only that portion of the
confidential information that it is legally compelled to disclose
H.
Covenant by recipient not to solicit for employment (or employ) any (or certain)
of the disclosing party’s employees for a stated period of time
I.
Non-competition covenants – recipient generally resists giving such covenants;
also present unlawful restraint of trade issues
J.
Acquisitions in which the acquirer and the target company are competitors
K.
L.
IV.
Confidential information that recipient is legally compelled to disclose
1.
Particularly sensitive to the target company, as a business matter
2.
May present issues for both parties under antitrust laws if acquisition is
not consummated (or, in some cases, prior to closing)
3.
May necessitate “phased” disclosure, with the most competitively
sensitive information being disclosed only upon or shortly before closing
(and not to sales, marketing or production personnel)
Special considerations in acquisitions of public companies
1.
Standstill agreements
2.
Failed negotiated transactions that turn into tender offers – tension
between confidentiality covenants and duty under securities laws to
publicly disclose material non-public information
Return (or destruction) of confidential information if acquisition not
consummated
USING LETTERS OF INTENT IN BUSINESS ACQUISITIONS
A.
Basic characteristics of a letter of intent (also referred to as an “agreement in
principle,” “memorandum of understanding” or “heads of agreement”)
1.
The provisions setting forth the terms of the acquisition are generally nonbinding
2.
Expectation that letter of intent will ultimately be replaced by a definitive
acquisition agreement
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