In Revlon, Inc. v. MacAndrews & Forbes Holding, Inc., 506 A.2d 173 (Del. 1985), the Delaware Supreme Court held that incumbent management, pursuant to its fiduciary duties to the company, must not play favorites when a bid has been made for the company. Rather, management has a duty, a “Revlon duty,” or “Revlon duties” to consider all bids for the company when it has effectively been put up for sale and to award the sale of the company to the bidder that maximizes shareholder wealth. In particular, excessive “break fees” and too-restrictive “no-shop clauses” have been held to violate these Revlon duties.
Similar duties have been held to apply to UK companies under s. 172 of the Companies Act 2006; under Irish Law pursuant to s.228 Companies Act 2014. However, this duty does not extend to frivolous or non-serious offers.