Client Wins Dismissal in 'Step Down' Tender Offer Litigation

Skadden represented Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc. and Sun Merger Sub., Inc. in litigation arising out of Valeant's $13 billion acquisition of Salix Pharmaceuticals, Ltd. Valeant's all-cash tender offer contained a "step down" provision, in which all stockholders would receive a lower price per share if a majority of shares did not tender by a certain date. On May 19, Chancellor Andre Bouchard of the Delaware Court of Chancery dismissed all claims, agreeing with the defendants that the plaintiffs' allegations did not state a claim that the Salix directors breached their fiduciary duties by agreeing to the all-cash Valeant offer over a competing stock and cash offer from Endo Pharmaceuticals plc, or that Valeant aided and abetted any alleged fiduciary breaches. The court also found that the step-down provision did not render Valeant's tender offer coercive.