Morning Call, March 24, 2020: Shareholder Defenses and Credit Facilities in the Coronavirus Era
March 24, 2020

 

The coronavirus (COVID-19) crisis is leading many companies to consider the implications for their takeover defenses and credit facilities. These subjects were discussed by Louis Goldberg, co-head of Davis Polk's global Mergers and Acquisitions Group, and Sartaj Gill, a partner in our Finance Group, today in our second 20-minute Morning Call on coronavirus issues. The discussion included and was moderated by Nora Jordan, a partner and head of the Investment Management Group.

Among the specific topics discussed:

  • Factors companies are weighing as they consider responding to the sharp drop in stock prices by adopting a shareholder rights plan (a “poison pill”) 
  • Possible ways to customize a rights plan to make it more palatable to third parties including proxy advisory services
  • Multiple strategies companies are implementing or considering to increase cash on the balance sheet
  • Possible implications of a prolonged economic slowdown on debt covenant compliance

Related content on Davis Polk Coronavirus Updates includes: