Travelport legal case could set precedent for MAC clauses
ONE of the world’s most feared activist investors is heading to the High Court in a legal case that will have significant ramifications for M&A transactions left in limbo as a result of coronavirus.
UK-based firm Travelport, co-owned by Wall Street hedge fund Elliott Management, is suing US-based peer Wex after it pulled out of a $1.7bn deal to buy its payments businesses.
Wex claimed in May that the global pandemic triggered a material adverse change (MAC) clause, allowing it to walk away from the acquisition of eNett and Optal. Judges agreed to an expedited hearing in September ahead of the deal’s expiration at the end of October.
Investment bankers and lawyers will pay close attention to the case, believed to be the first like it heard since the pandemic hit.
David Greene, a senior partner at Edwin Coe and Law Society president-inwaiting, said: “The question is: does this crisis fall within the MAC clause? This will set a precedent for the courts’ interpretation of these clauses and the effect of the crisis upon them.”