What duties do boards owe shareholders in connection with merger and acquisition transactions?

As a general matter, directors owe shareholders fiduciary duties of loyalty, due care, good faith, and candor. In the context of mergers and acquisitions, many courts have explained that directors must focus on getting the best price possible. Directors must not favor one buyer over another for improper reasons, and it’s vital to ensure that potential conflicts of interest do not impinge on the process. Furthermore, after a deal has been announced, boards must disclose any and all material information in the proxy statement or 14D-9 to enable shareholders to make a fully informed decision to accept or reject the transaction.