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Business Organizations Keyed to Cox
Malpiede v. Townson
Citation:
780 A.2d 1075 (2001)Facts
Frederick’s of Hollywood is a retailer of women’s lingerie and apparel. This case centers on the merger of Frederick’s into Knightsbridge Capital Corporation under circumstances where it became a target in a bidding contest. On June, 1997, the Frederick’s board approved an offer from Knightsbridge to purchase all of Frederick’s outstanding Class A and Class B shares for $6.14 per share in cash in a two-step merger transaction. The term of the merger agreement prohibited the board from soliciting additional bids from third parties, but the agreement permitted the board to negotiate with third party bidders when the board’s fiduciary duties required it to do so. On September 6, Knightsbridge increased its bid to match the $7.75 Veritas offer. On September 11, 1997, Veritas increased its cash offer to $9 per share.
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