Trav­el­port le­gal case could set prece­dent for MAC clauses

The Daily Telegraph - Business - - Business - By Oliver Gill

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.”

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