What is the effect of the Revlon doctrine on board strategy during a sale of control?

• A. The board should always pursue a single bidder regardless of value.
• B. The board may abandon a sale if it believes a bidding process is too costly.
• C. The board should focus on preserving management's job security above all.
• D. The board must maximize value for shareholders and conduct a fair process; they cannot prematurely abandon a sale that would yield maximum value.

Answer: (D)

When a sale of control is imminent, the board’s fiduciary duties shift toward maximizing value for shareholders through a fair and competitive process. This means actively seeking the best price available, typically via an auction or structured bidding process, and avoiding actions that would undermine the value of the deal. The board cannot prematurely abandon the sale simply because it would be costly or because it prefers to protect management’s position; if skipping the sale or favoring a single bidder would reduce the value ultimately realized by shareholders, such conduct would breach the duty to maximize value. In short, the board must pursue the highest reasonably obtainable value for shareholders through a fair process, and cannot abandon a sale that would yield maximum value.