The only way around DADW provisions is for potential buyers to breach the agreement and pay a breakup fee, which is usually between 3% to 5% of the total deal value.
Walsh feels that shareholders have a right to know if a DADW provision was included in the original agreement.
If this is indeed the case, Walsh argues that DADW provisions create “the false impression that any company could have made a superior proposal,” when in reality potential buyers have to pay a breakup fee to propose a better price.
Essentially, this boils down to an argument of ‘the board is enriching themselves with this deal’ while ‘shareholders are being hosed,’ which is exactly what the suit claims.
Per Walsh, Noble’s directors “stand to be richly compensated” through “a vast array of particularly lucrative deal devices,” including golden parachutes. It remains to be seen whether Walsh’s suit will have an impact on the deal.
The USA Herald has reached out to Chevron for an update on the agreement, but no update is available at this time. Coverage of this story is ongoing.