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MEMORANDUM ON D.D. 2A 1 (November 29, 1989)

handle is hein.ali/alicgv0056 and id is 1 raw text is: ;# 2

SEN  BY:WACHTELL LIPTON NY  :12- 4-89  ;11:43AM  ;  2123711689-
WACHTELL, LIPTON. ROSEN & KATZ
November 29, 1989
TO:   The Council of Thp Ameri      w Institute
FROM:   Martin Lipton
RE:   Principles of Corporatt  o  rnance; Analysis and
Recommendations - Discussion Draft No. 2A
------------      - -     --- --------- M--------- - -- - -
Draft 2A continues the bias in favor of corporate
raiders and fails to recognize the strong legislative and
judicial movements to reaffirm the right of a board of direc-
tors of a company to reject and defeat a hostile tender offer.
aection 6.02
Section 6.02 denies the right of the target's board
of directors to block a hostile tender offer notwithstanding
the board's reasonable and good faith determination that the
price is inadequate or it is not the right time to sell or
liquidate the company. Instead, Section 6.02 compels the
board of directors faced with a cash tender offer at a sub-
stantial premium to sell the company to the highest bidder or
to liquidate it. Thus, Section 6.02 uarantees a profit to
any corporate raider who accumulates a position in a company
and then makes a cash tender offer.

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