The Deal Activist Investing Today: Wachtell’s Tetelbaum Talks NDAs
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Feb 23, 2024 Elina Tetelbaum is an activist defense partner at Wachtell Lipton Rosen & Katz, specializing in corporate activism preparedness. She discusses the crucial role of Non-Disclosure Agreements (NDAs) in activist investing, sharing insights on how they strategically shape negotiations between corporate boards and activists. Elina highlights Disney's tactical use of an NDA to navigate pressures from activist investors, illustrating how confidentiality can influence significant corporate decisions. With real-world case studies and anecdotes, she underscores the importance of effective negotiation in this dynamic landscape.
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Power of NDAs in Hostile Bids
- Early in her career, Elina Tetelbaum learned the power of NDAs defending Vulcan Materials against Martin Marietta's hostile bid.
- The court held the bidder misused confidential information, which blocked their proxy fight and was a huge legal victory.
NDAs Shape Activist Engagements
- NDAs set the tone in activist-company negotiations and reveal power dynamics in play.
- Activists often resist NDAs that limit their ability to trade or speak publicly while companies want them to protect sensitive info.
Activist Directors' Confidentiality Duties
- Activist directors on a board have fiduciary duties to all shareholders and cannot freely share confidential information.
- Winning a proxy fight does not automatically grant activists the right to share board info with themselves.