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Understanding Saturday Night Special [Corporate Law]: A Comprehensive Guide
Definition & Meaning
The term "Saturday Night Special" refers to a type of takeover bid where one company attempts to acquire another company under high-pressure circumstances. This approach typically involves a surprise tender offer that is open for a very short time, often just one week. The goal is to compel shareholders to accept the offer quickly, leaving little room for the management of the target company to respond adequately. However, such practices are prohibited under section 14(e) of the Williams Act, which regulates tender offers in the United States.
Table of content
Legal Use & context
In corporate law, the term "Saturday Night Special" is used to describe aggressive takeover strategies that can put undue pressure on company management and shareholders. This term is relevant in the context of mergers and acquisitions, where companies may use rapid tender offers to secure control over another entity. Users can manage related legal processes using templates from US Legal Forms that are drafted by qualified attorneys, ensuring compliance with applicable laws.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A company announces a tender offer to acquire a competitor, stating that the offer will only be valid for five days. This creates urgency for shareholders to accept the offer quickly. (hypothetical example)
Example 2: A firm uses a Saturday Night Special strategy to bypass lengthy negotiations, hoping to gain control of the target company before management can mount a defense.
Relevant laws & statutes
The primary statute governing this term is the Williams Act, specifically section 14(e), which prohibits certain types of tender offers that may be misleading or coercive to shareholders. This law aims to protect investors by ensuring they have adequate time and information to make informed decisions.
Comparison with related terms
Term
Definition
Key Differences
Hostile Takeover
An acquisition attempt that is resisted by the target company's management.
Unlike Saturday Night Specials, hostile takeovers may involve longer negotiation periods and more complex strategies.
Tender Offer
A public offer to purchase some or all of shareholders' shares at a specified price.
Saturday Night Specials are a specific type of tender offer characterized by their short duration and pressure tactics.
Common misunderstandings
What to do if this term applies to you
If you find yourself in a situation involving a Saturday Night Special, it's important to understand your rights as a shareholder. Review the details of the offer carefully and consider consulting with a legal professional to explore your options. Additionally, you can access legal form templates from US Legal Forms to assist in managing the process effectively.
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