Was the boards refused to remove the poison pill

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Reference no: EM13183671

Wallace, Inc. adopted a poison pill. Five years later, Moore Corp. offered to buy all Wallace's stock for $56 a share, which was 27 percent over the existing market price. However, the offer was contingent upon the Wallace board eliminating the poison pill. Wallace consulted with its investment banker, which advised the company that the offer was inadequate but did not inadequate. Both the board and its banker believed that Wallace's recently adopted corporate strategy would lead to an increase stock price. Indeed the company's recent financial results had been better than expected. Despite these improved results, more than 73 percent of Wallace shareholders offered their shares to Moore. When Wallace refused to remove the poison pill, Moore filed suit. Was the board's refused to remove the poison pill a violation of the business judgment rule?

Reference no: EM13183671

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