How an unsolicited bid unfolds
A bidder who cannot reach agreement with the board has a few paths. It can make a tender offer directly to shareholders, run a proxy contest to replace directors with a slate more open to a sale, or combine the two. Before either, a bidder often builds a stake, and crossing certain ownership levels requires public disclosure. Making a private approach public is a common way to press the board through its shareholder base. The target's charter, bylaws, and state corporate law shape what a bidder can do and how quickly, and many structural defenses depend on what was already in place.
The board's process becomes the record
Courts reviewing defensive measures tend to look at how the board decided, not only at what it decided. Directors who inform themselves, rely on independent financial and legal advice, and weigh the offer against the company's own prospects stand on firmer ground than a board that rejects a bid reflexively. Minutes, board materials, and advisors' analyses become the evidence if shareholders sue. Directors should avoid side conversations with the bidder and keep communications in the company's designated channels. Conflicts, such as management's interest in keeping their positions, need to be identified and handled, sometimes through a committee of independent directors.
Decisions in the first days
The early choices concern posture and communication: whether to respond publicly, whether to meet the bidder, whether to explore alternatives such as another buyer, and whether to adopt or adjust defensive measures like a rights plan. If a tender offer is launched, the company is generally required to state its position to shareholders within a set period. If we represent a bidder, the questions run the other way: how to build a position within the disclosure rules, how the target's defenses might be challenged, and whether a negotiated deal is still within reach. Either way, we start by reading the governing documents and the applicable state law, because they define the field everything else happens on.
