Revlon duties

Delaware law runs two distinct standards over a contested deal. Under Unocal, defensive measures against a perceived threat are reviewed for reasonableness and proportionality, which gives a board room to defend the company's independence. Under Revlon, once the board has decided to sell for cash or a change of control is inevitable, the duty narrows to getting the best value reasonably available to shareholders.

The practical effect of that structure is that a Delaware board can decline to sell. It can adopt a rights plan, keep an unwanted offer away from shareholders, and argue that the standalone plan is worth more, subject to judicial review of proportionality. A staggered board compounds it, because a bidder that cannot buy the board must win two annual election cycles to replace it.

The UK has no equivalent bifurcation, and the reason is structural rather than philosophical. Rule 21 removes the defensive tools that the Unocal analysis exists to police, so there is nothing for a proportionality test to review. The Code asks one consistent question throughout: is the board doing anything that would frustrate shareholders' ability to decide for themselves.

This contrast is the single most useful thing a candidate can say about hostile situations, because it explains behaviour rather than listing rules. In Delaware the fight is over the board, so bidders negotiate with directors and run proxy contests. In the UK the fight is over the register, so bidders court shareholders, collect irrevocable undertakings and manage the offer timetable.