Dealpolitik: AT&T Gets Unusual Deal Protections in Leap Deal

Buyers almost always protect themselves from material adverse changes in a target’s business by reserving the right to walk away if a “MAC” happens. But in AT&T’s acquisition of Leap Wireless International, the merger agreement also contains what might be referred to as a material favorable change clause. Although a similar provision has been included in a few previous merger agreements, it is unusual.

Buyers of public companies have the risk that they will not be able to complete a purchase because a board may decide that there has been a development that requires it, in the exercise of its fiduciary duties, to change its recommendation on the deal. Such a change would usually make it difficult if not impossible to get the required shareholder vote. In other words, there could be a development that makes a deal that looked good when it was signed no longer look optimal. And directors have to tell shareholders what they think.

Read the rest of this post on the original site »

Must-Reads from other Websites

Panos Mourdoukoutas

Why Apple Should Buy China’s Xiaomi

Paul Graham

What I Didn’t Say

Benjamin Bratton

We Need to Talk About TED

Mat Honan

I, Glasshole: My Year With Google Glass

Chris Ware

All Together Now

Corey S. Powell and Laurie Gwen Shapiro

The Sculpture on the Moon

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

Read more »