Decision of note for REITs contemplating asset acquisitions involving stock consideration that requires stockholder approval, even if the transaction does not effect a change-in-control.

Background –

Following the announcement of the sale of a public company, stockholders with minimal holdings now routinely file litigation seeking an injunction of the stockholder vote, in hopes that a company will bow to the pressure to settle, given the stakes. See City Trading Fund v. Nye, No. 651668, 2015 WL 93894 at 22 (observing the “ubiquity and multiplicity of merger lawsuits, colloquially known as a ‘merger tax,’” which are “filed only a relatively short time before the shareholder vote”). In recent years, this trend has expanded to other corporate acquisitions, even those that do not involve the sale or change-in-control of a public company, as long as the transaction requires a stockholder vote.