877 F.2d 496 (1989)
Amanda Acquisition Corporation is a shell with a single purpose of acquiring Universal Foods Corporation.1 It is a subsidiary of High Voltage Engineering Corp., a small electronics firm in Massachusetts.2 Most of High Voltage's equity capital comes from Berisford Capital PLC, a British venture capital firm, and Hyde Park Partners L.P., a partnership affiliated with the principals of Berisford.3
Universal Foods Corporation is a diversified firm incorporated in Wisconsin and traded on the New York Stock Exchange.4 It is covered by Wisconsin's anti-takeover law.5
In mid-November 1988, Universal's stock was trading for about $25 per share.6 On December 1, Amanda commenced a tender offer at $30.50 per share, to be effective if at least 75% of the stock should be tendered.7 This all-cash, all-shares offer has been increased by stages to $38.00.8 Amanda's financing is contingent on a prompt merger with Universal if the offer succeeds, so the offer is conditional on a judicial declaration that the law is invalid.9 It is also conditional on Universal's redemption of poison pill stock.10
Wisconsin's statute provides that no firm incorporated in Wisconsin and having its headquarters, substantial operations, or 10% of its shares or shareholders there may engage in a business combination with an interested stockholder.11 This restriction lasts for 3 years after the interested stockholder's stock acquisition date unless the board of directors has approved the combination or the purchase of stock in advance.12 An interested stockholder is one owning 10% of the voting stock, directly or through associates.13 A business combination is a merger with the bidder or any of its affiliates, sale of more than 5% of the assets to the bidder or affiliate, or similar transactions.14
Amanda filed this suit seeking a declaration that this law is preempted by the Williams Act and inconsistent with the Commerce Clause.15 It added a pendent claim that the directors’ refusal to redeem the poison-pill rights violates their fiduciary duties to Universal’s shareholders.16 The district court declined to issue a preliminary injunction.17 It concluded that the statute is constitutional and not preempted.18
The parties treat their appeals as if taken from the conclusive denial of relief.19 The financial stakes on both sides cancel out, and the question becomes who is right on the merits.20 The court addressed the validity of the Wisconsin statute as the threshold question.21
Whether Wisconsin's third-generation takeover statute is preempted by the Williams Act?22
The Williams Act regulates the process of tender offers through timing, disclosure, proration, and best-price rules but does not preempt state corporate laws that affect only the substance or benefits of acquisitions after shares are acquired, provided the state law leaves the federal bidding process intact and creates no direct conflict with federal procedures.23
No. Wisconsin's statute permits full compliance with federal tender offer rules while imposing a three-year delay on business combinations such as mergers or sales of more than five percent of assets unless the board approves in advance.24 The statute applies because Universal is incorporated in Wisconsin and meets the contacts thresholds, yet it does not alter disclosure, timing, or proration requirements under the Williams Act.25 This structure parallels the Indiana control-share statute upheld in CTS Corp. v. Dynamics Corp. of America, which sterilized voting rights without regulating the acquisition process itself.26
Wisconsin's third-generation takeover statute is not preempted by the Williams Act.27
Whether Wisconsin's third-generation takeover statute violates the Commerce Clause?28
The Commerce Clause permits a state to regulate the internal affairs of corporations incorporated within its borders.29 The regulation does not violate the dormant Commerce Clause so long as the law does not discriminate against out-of-state bidders or investors.30 It also must not subject corporations to inconsistent regulatory regimes from multiple states.31
No. Wisconsin's statute applies exclusively to firms incorporated in Wisconsin that satisfy the headquarters, operations, or shareholder thresholds and treats all bidders and investors identically regardless of domicile.32 The law regulates only domestic corporate affairs and creates no risk of inconsistent regulation across states, consistent with the Supreme Court's analysis sustaining Indiana's similar statute in CTS Corp. v. Dynamics Corp. of America.33
Wisconsin's third-generation takeover statute does not violate the Commerce Clause.34