Delaware Chancery Court Delays Martin Marietta’s Takeover Attempt of Vulcan Materials Due to Confidentiality Agreement Breaches
On May 4, 2012, the Delaware Chancery Court enjoined Martin Marietta from pursuing its $5.5 billion unsolicited attempt to acquire Vulcan Materials for four months, based on its use and disclosure of nonpublic information received during discussions the parties held about the possibility of a negotiated merger. Although the confidentiality agreement between the parties did not contain an explicit standstill provision, the Court concluded that, based on the specific wording of the agreement as well as the parties’ negotiations and other extrinsic evidence, the companies intended to bar disclosure of the existence of their negotiations and to limit the use of shared information to a mutually consensual negotiated transaction.