Amanda Acquisition Corp. v. Universal Foods Corp.,

877 F.2d 496 (1989)

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Nature of the Case

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Facts

Amanda Acquisition Corp (P) is a shell with a single purpose of acquiring Universal Food Corp. On December 1 Amanda commenced a tender offer at $30.50 to be effective if at least 75% of the stock should be tendered. This all-cash, all-shares offer has been increased by stages to $38.00. Wisconsin has a statute that prohibits a corporation to engage in a business combination with an interested stockholder for 3 years after the interested stockholder's stock acquisition date unless the board of directors of the Wisconsin a corporation has approved, before the interested stockholder's stock acquisition date, that business combination or the purchase of stock. The district court found that this statute effectively eliminates hostile leveraged buyouts. P filed this suit seeking a declaration that this law is preempted by the Williams Act and inconsistent with the Commerce Clause. The District Court declined to issue a preliminary injunction. It concluded that the statute is constitutional and not preempted, and that under Wisconsin law directors are entitled to prevent investors from accepting tender offers of which the directors do not approve.