Standstills in the Headlights

Although they are among the most common agreements in corporate practice, confidentiality or non-disclosure agreements, and the “standstill” provisions they often include, have historically not had a starring role in mergers and acquisitions litigation. That changed in 2012.Last July, the hard-fought takeover battle between Martin Marietta Materials and Vulcan Materials led to litigation in the Delaware courts in which it was clearly established that confidentiality and use restrictions can block unsolicited acquisitions even in the absence of an explicit standstill agreement.1 More recently, a pair of bench rulings from the Delaware Court of Chancery shone the spotlight on standstill provisions in the context of announced transactions, specifically a popular formulation that prohibits potential bidders from even privately requesting that a target company in the process of being acquired waive the standstill to allow the requestor to make a takeover bid (which have cutely been nicknamed “Don't Ask, Don't Waive” provisions)