Back when I was a lad, one of the big corporate law issues was the constitutionality of state takeover legislation. The issue has been quiescent for a long time, but Steven Davidoff reports that it has resurfaced in Alimentation Couche-Tard’s hostile offer for Casey’s General Stores:
Couche-Tard is arguing that Iowa’s antitakeover statutory scheme is unconstitutional because it is pre-empted by the Williams Act (the federal rules governing tender offers), violates the Constitution’s commerce clause and is a seizure of shareholder property in violation of the takings clause.
The first two forms of these claims were regularly litigated in the 1980s, including in the Supreme Court in the cases of Edgar v. Mite and CTS Corp. v. Dynamics Corp. of America. The latter case upheld the Indiana control share acquisition statute, and set the constitutional framework for later federal courts to largely uphold state antitakeover statutes.
In his analysis of the issue, Davidoff kindly cites to my work:
Couche-Tard is relying on the Delaware cases to uphold Delaware’s almost-identical business combination statute. The Delaware cases did so in part on the grounds that bidders could still have a meaningful chance to succeed in their bids.
In Amanda, however, Judge Easterbrook upheld the Wisconsin business combination statutes on broad grounds, namely that “because Wisconsin leaves the process alone once a bidder appears, its law may co-exist with the Williams Act.” The Iowa statute acts in a similar manner.
So, the initial question is whether the Iowa court would adopt the approach of the Delaware cases or that of Amanda. (For a thoughtful and lengthy analysis of this issue, see this post by Prof. Stephen M. Bainbridge, who concludes that any court would be more likely to rely on Amanda than adopt the “meaningful success” test.)
Davidoff also discusses the interesting question of whether state takeover legislation is an unconstitutional violation of the takings clause, which he aptly calls "a completely untested and novel claim."
If this sort of issue is of interest, you'll want to check out my Mergers & Acquisitions book:
