Opinion ID: 2165124
Heading Depth: 2
Heading Rank: 3

Heading: The Merger Negotiations

Text: Plaintiff raises four misrepresentation arguments relating to the disclosure of merger negotiations in the proxy statement: that the statement (i) disclosed that the board had negotiated the Merger when in fact Connell negotiated the Merger during the summer of 1992 without board approval, himself arriving at the $20 figure for the share cap; (ii) should have disclosed more emphatically Weinerman's and the Chairman's abstentions; (iii) should not have described the final Merger vote as unanimous when in fact the vote purportedly was eight in favor, one in opposition, and five abstaining (8-1-5); and (iv) should have been supplemented with disclosure of the board's post-approval renegotiation meetings with BoB. The Court of Chancery held that these purported facts were immaterial. We agree. Plaintiff's misrepresentation claims lack merit. His claim that Connell first suggested the $20 share cap figure, which was not the exchange value as of the date the board approved the Merger, does not satisfy the materiality test under the circumstances of this case. See Cede & Co. v. Technicolor, Inc., Del.Supr., 634 A.2d 345, 372 (1993) (affirming trial court's finding that there was no need to disclose a share value which a target director initially deemed acceptable, without consulting investment advisors, because non-disclosure [of such was] plainly not material). But cf. Smith v. Van Gorkom, Del.Supr., 488 A.2d 858, 890-92 (1985) (finding violation of disclosure obligations where proxy statement partially disclosed that target director first suggested final, agreed-upon merger share price but failed to describe accurately the motive behind focusing on that figure). Given that the proxy statement described Weinerman's and the Chairman's abstentions and their respective reasons therefor in great detail, [27] plaintiff's second argument is without merit. The third and fourth arguments simply mischaracterize the facts. With regard to the third argument, the 8-1-5 vote was an interim one which was disclosed; the final vote, which also was disclosed, was twelve in favor with two abstentions. Further, the description of the 12-0-2 vote  unanimous[] ... (with two directors abstaining)  was proper. See Weinberger v. UOP, Inc., Del.Ch., 426 A.2d 1333, 1353 (1981), rev'd on other grounds, Del.Supr., 457 A.2d 701 (1983). As to plaintiff's final argument, the board's discussion with BoB did not involve a renegotiation of the Merger. The primary purpose of the meeting was to ensure compliance with the terms and conditions of the original, approved Merger  more specifically, that the closing of the Merger be timely. Such subsequent, purely implemental meetings are immaterial under the circumstances of this case. See Bershad v. Curtiss-Wright Corp., Del.Supr., 535 A.2d 840, 847 (1987) (holding that there is no requirement under Rosenblatt of play-by-play disclosure of merger negotiations because such details would not alter the total mix of information provided stockholders and thus are immaterial). Thus, the Court of Chancery did not err in rejecting plaintiff's claims relating to the Merger negotiations.