Legitimacy of Defensive Tactics in Tender Offers

I Ambiguity with respect to the scope of permissible target defenses becomes espe- cially troubling in light of Judge Friendly's admonition that the contestants in a tender fight act quickly, sometimes impulsively, often in angry response to what they consider, whether rightly or wrongly, to be low blows by the other side.Probably there will no more be a perfect tender offer than a perfect trial.Congress intended to assure basic honesty and fair dealing, not to impose an unrealistic requirement of laboratory conditions that might make the new statute a potent tool for incumbent management to protect its own interests against the desires and welfare of the stockholders.Electronic Speciality Co. v. International Controls Corp., 409 F.2d 937, 948 (2d Cir.1969).For a discussion of Electronic Speciality, see Note, Defensive Tactics Employed by Incumbent Management in Contesting Tender Offers, 21 STAN.L. REv.1104, 1115-19 (1969).4 See, e.g., Weeks Dredging & Cont., Inc. v. American Dredging Co., 451 F. Supp.468, 471-72 (E.D. Pa.1978); Emhart Corp. v. USM Corp., 403 F. Supp.660, 661-62 (D. Mass.), vacated on other grounds, 527 F.2d 177 (1st Cir.1975); Cauble v. White, 360 F. Supp.1021, 1025-26 (E.D. La. 1973).For example, in Emhart, the target corporation communicated to its shareholders through press releases, advertisements, and letters that the tender offer was "quite inadequate" and was an attempt to seize control of the target "at bargainbasement prices."403 F. Supp. at 662.