there remain interesting questions about the way in which the rulings of Delaware's courts areevolving.
What will Delaware wear?
The state's most famous ruling came in 1989. That year, its supreme court judged that Time's
directors could “just say no” to a $200
-per-share hostile bid from Paramount, forcingshareholders to accept a $138-per-share friendly bid from Warner instead. More recently,however, Delaware has found itself undermined by several federal incursions into its authority.As part of its efforts to ward off further federal attacks, Delaware may feel the need to revisit thethinking behind the Time Warner ruling. If PeopleSoft does not present it with an opportunity,perhaps Disney will.Oddly, for a company frequently accused of entrenched management, Disney has neither apoison pill nor a staggered board. The firm dismantled both defences after a row with activistshareholders in 1999. It has turned for help in its defence to Marty Lipton, a founding partner atthe law firm Wachtell, Lipton, Rosen & Katz and a leading source of advice on howmanagement should defend itself from hostile attacks.The Disney board may eventually have to confront two tough questions. One is whether it canstill (as Time did) just say no at any price. The other is whether it can approve and justify extra-legal defensive measures. These could include Disney itself buying a firm or returning billions of dollars to its shareholders via, say, a big share buy-back. Both moves could well kill off Comcast's interest in the company.Europe is also currently hosting a giant hostile takeover bid, one that in value at least is on a par
with Disney's. The €46 billion ($58 billion) bid by Paris
-based Sanofi-Synthélabo for its biggerpharmaceutical rival, Aventis, was rejected this week by Aventis's board because the cash-and-shar
es offer “is clearly inadequate from a financial standpoint”. Aventis also claims that there are
problems with its rival's products
in particular with Sanofi's popular anti-thrombosis drugPlavix, which is facing a challenge to its patent in America.Defences in Europe against hostile bids are notoriously more robust than those in America. Butthe battle between the two pharmaceuticals giants shows that, despite the efforts of somecountries to maintain elaborate takeover defences, the walls may be slowly beginning tocrumble.Aventis, a Franco-German group, has bought itself some time by launching an appeal against adecision by France's financial-markets authority that there are no grounds to block the bid. Itmight also search for a white knight to counter the bid: the Swiss group Novartis and America'sJohnson & Johnson are two potential suitors that have been mentioned, although both haverefused to comment.