A Case of a Hostile Acquisition

The Duke Energy’s acquisition of Progress Energy may be an interesting case of a hostile acquisition. According to a BusinessWeek’s article, Progress Energy’s CEO was going to serve as the CEO of the merged company. And he did, but only for less than two hours. The article says:

At 4:30 p.m. the Duke board elected Johnson CEO. Then, after Johnson left to celebrate, the board took another vote and ousted him. He served as chief executive for two hours, give or take a few minutes. The Duke board awarded him an exit package of $45 million in deferred compensation, severance, and other benefits. To finish an eventful afternoon, the Duke board reinstalled Rogers in the top job.

I would tend to think that a merger and acquisition contract have clauses to preempt this kind of actions. However, it does not seem to be the case.

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