Confidentiality Agreement Impedes Hostile Take-Over Bid

In Martin Marietta Materials, Inc. v. Vulcan Materials Company, Chancellor Strine of the Delaware Court of Chancery enjoined a hostile take-over bid on the ground that confidentiality agreements between Martin Marietta, the bidder, and Vulcan, the target, prevented the bid. The judgment temporarily prevents Martin Marietta from acquiring Vulcan pursuant to a US$5.3-billion hostile bid, and from pursuing a proxy contest in which Martin Marietta was seeking the election of four of its nominees to Vulcan's board of directors. In support of his decision, Chancellor Strine cited the 2009 Ontario Superior Court of Justice decision, Certicom Corp. v. Research in Motion Ltd. In that decision, following an application brought by Blakes on behalf of Certicom, the Court enjoined RIM's hostile bid for Certicom as a result of RIM's breach of its confidentiality agreements with Certicom. Martin Mariettaserves as a reminder that confidentiality agreements should only be entered