Responding to Unsolicited Offers to Buy discusses the issues that the CEO, Board of Directors, and trustees face when an unsolicited offer is received. It talks about how a "not for sale" resolution could make things worse, at least from a trustee perspective. The article suggests a Policy on Unsolicited Offers that should be reviewed and approved by the Board of Directors on a regular basis and provides a template:
The Board of Directors of [Company] has adopted the following policies and procedures with respect to unsolicited offers to purchase the Company:
Generally, a sale of the Company is not deemed to be in the best interests of the shareholders at this time.
Notwithstanding the general policy set forth in Paragraph 1, serious offers to acquire the Company will be considered as described below.
Unsolicited offers will be subject to a preliminary review process. If the offer is deemed to be serious, it will be referred to the Board for further action.
In determining whether an unsolicited offer is serious, the prospective acquirer will generally be asked to supply the following information:
Identify the prospective acquirer and all related parties; State the prospective acquirer's preliminary acquisition terms including price, key representations, warranties and conditions, timing of the transaction, and proposed payment terms; Provide detailed financial information establishing the prospective acquirer's capability to complete the transaction; Describe the effect of the proposed acquisition on current Company operations, management, employees, customers and communities served by the Company; State the industry experience of the prospective acquirer; Provide examples of prior successful acquisitions by the prospective acquirer; and State the key elements of the prospective acquirer's business plan following acquisition of the Company.
Serious offers will be referred to the [Board/Board Committee] for negotiation of terms. Final disposition of the Company is subject to Board and shareholder approvals required by federal and state corporate law, including a pass through procedure whereby participants in the company's employee stock ownership plan direct the trustee of the ESOP plan as to how to vote the shares held by the plan.
