ROH and DOW Merger - Question
Quick summary of the situation: DOW agrees to acquire ROH in June 2008 for $78/share (cash), deadline to close was today. DOW fails to close, gets sued by ROH in order to force specific performance. Merger agreement is airtight, no MAE, no option to walk and pay breakup fee, not contingent on financing, etc. Delaware court grants ROH's request for expedited trial.
Question to those with more insight than I -
I have read some speculation that DOW will renegotiate the deal at a lower price. As it seems ROH is on quite solid legal ground, my question is this: What incentive does ROH have to negotiate? It's a cash deal, so ROH shareholders don't really care what happens to DOW after the deal closes. So, if you're ROH, don't you just say "Give me my $78, suckas. A deal's a deal"?
I don't have too much insight, but my guess would be to avoid legal fees, and because delaying payment bears an interest cost. Of course, the judge could order DOW to pay for both of those, I'm not too sure
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