The state of Wisconsin enacted an anti-takeover statute that protects corporations that are incorporated in Wisconsin and have their headquarters, substantial operations, or 10% of their shares or shareholder in the state. The statute prevents any party that acquires a 10% interest in a covered corporation from engaging in a business combination (merger) with the covered corporation for three years unless approval of management is obtained in advance of the combination. Wisconsin firms cannot opt out of the law. This statute effectively eliminates hostile leveraged buyouts because buyers must rely on the assets and income of the target company to help pay off the debt incurred in effectuating the takeover.

Universal Foods (Universal) was a Wisconsin corporation covered by the statute. Amanda Acquisition Corporation (Amanda) commenced a cash tender offer for up to 75% of the stock of Universal. Universal asserted the Wisconsin law. Is Wisconsin's anti-takeover statute lawful?