Noble Energy investor challenges board of directors over Chevron deal in lawsuit


The suit also argues that Noble’s registration statement lacks key details financial projection-wise, specifically whether a “Don’t Ask, Don’t Waive” (DADW) provision was included in the deal.

What does this mean exactly?

There are two components to consider when looking at DADW provisions. A standstill provision is a tool used by sellers, in this case Noble Energy, to limit certain actions on the part of potential buyers. Standstill provisions need to be included in the agreement from the very beginning.

For the most part, standstill provisions are used an anti-takeover measure.

Once a bid is made, Chevron is limited in the ways in which it can control the deal. Thus, if Chevron and another firm are both aiming to acquire Noble, both potential buyers are unlikely to start a bidding war.

The addition of DADW provisions simply indicate that Chevron cannot request Noble Energy to waive the standstill provisions to have greater control over the agreement.

Although the usage of standstill and DADW provisions gives sellers more control, there are concerns that this approach limits the possibility of getting the best price possible due to limitations on competition between buyers.