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Takeover Battles: New Limits on Maximizing Shareholder Value?
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Date: May 1 2007 |
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Directors of a company that is 'in play' have a fiduciary obligation to maximize shareholder value. One would have thought that this rule would always prevail. However, in Ventas Inc v Sunrise Senior Living Real Estate Investment Trust(1) the courts of Ontario preferred to subject the rule to an important exception: a 'superior proposal' that would otherwise maximize shareholder value will be prohibited from being considered by the target's directors and shareholders if it is made in contravention of the auction process established to sell the target company.
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