Replies to post #19047 on GTC Biotherapeutics (fka GTCB)

[DewDiligence]

Mechanics of a tender offer and short-form merger:

(1) Can LFB vote its shares even if they are the ones making the takeover offer?

Yes, they can; however, they probably won’t have to because (as explained in #msg-38906846), the most likely vehicle for a buyout by LFB is a cash tender offer followed by a short-form merger.

(2) What percentage of shares have to vote for a takeover before the courts consider the takeover a fact that all shareholders must accept?

Absent a contractual arrangement that specifies otherwise, a simple majority of the votes is sufficient for adoption. But, again, the most likely vehicle for a buyout by LFB is a tender offer followed by a short-form merger, which does not include a shareholder vote. (In effect, shareholders “vote” yay or nay on the buyout by either tendering or not tendering their shares.)

(3) What exactly do you mean by a short-form merger?

In most states—including Massachusetts, where GTC is incorporated—a shareholder who acquires 90% or more of the total equity of a public company in a tender offer can force the shareholders who did not tender their shares to exchange their shares for cash on the same terms as the tender offer. This process is sometimes referred to as a squeeze out—there is no shareholder vote and non-tendering shareholders gain nothing by not tendering.