The Delaware Court of Chancery has refused to enjoin an all-cash merger transaction negotiated by an actively engaged and independent board of directors, despite the fact that the sales process did not include customary features such as a fairness opinion or a fiduciary out, and the transaction was effectively locked up within a day by the execution of written consents by a majority of the stockholders. In re OPENLANE, Inc. S’holders Litig., C.A. No. 6849-VCN (Del. Ch. Sept. 30, 2011).
OPENLANE is a thinly-traded company with a highly concentrated shareholder base: 68.5 percent of its stock is held by a sixteen-person group of management and directors. Anticipating adverse market conditions in its principal business, the board negotiated with three potential strategic buyers in the first part of 2011, but did not undertake a broad auction or contact any possible financial buyers. In September, the board signed an agreement with the top bidder. Although no voting agreement was entered into as part of the merger, a majority of the company’s shareholders executed written consents approving the merger the very next day.