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Appraisal Rights Litigation Blog

Monthly Archives: December 2016

DFC Global Stockholders Urge Supreme Court to Disregard Professors’ Insistence on Merger Price as “Academic Fantasy”

Posted in Award Premium, Merger Price, Supreme Court

We have blogged before about the purported “friend of the court” brief that a group of law professors would like to file with the Delaware Supreme Court, urging the Court to reverse the Chancery Court’s ruling awarding DFC Global stockholders a premium to the merger price. The stockholders have now filed their own brief opposing… Continue Reading

Fed Rate Increase Bumps up Statutory Appraisal Interest

Posted in Federal Reserve Discount Rate, Interest on Appraised Value

The Federal Reserve’s recent rate hike, the second one in as many years, has increased the Fed’s discount rate — also known as its primary credit rate — by 0.25%, up to 1.25%. Effective as of December 15, this will increase the rate of statutory interest in appraisal cases to 6.25%, compounded quarterly, as the appraisal… Continue Reading

Professors Weigh In On DFC Global Appeal

Posted in Award Premium, Discounted Cash Flow Analysis, Merger Price, Supreme Court

We posted earlier this week about DFC Global’s appeal to the Delaware Supreme Court, challenging Chancellor Bouchard’s award to stockholders of a premium over merger price.  Yesterday, a group of law and corporate finance professors from various universities moved the Supreme Court to allow them to file so-called amici curiae briefs as non-party “friends of… Continue Reading

Supreme Court to Review DFC Global Award

Posted in Award Premium, Discounted Cash Flow Analysis, Merger Price, Supreme Court

We’ve posted before about the DFC Global decision, in which Chancellor Bouchard awarded a 7% premium over merger price, and then further increased that uplift by 9 cents in a ruling on reconsideration.  That ruling is now on appeal to the Delaware Supreme Court, and the appellant’s brief was submitted last week. As reported in… Continue Reading

Lender Processing Dissenters Receive Merger Price

Posted in Discounted Cash Flow Analysis, Interest on Appraised Value, Merger Price, Synergies

Today Vice Chancellor Laster issued a new appraisal ruling, Merion Capital LP v Lender Processing Services, pegging the appraised fair value to the merger price. The court found no reason to depart from merger price given the apparently reliable sale process and reliable projections.  The court performed its own DCF valuation, which came out 4%… Continue Reading

Delaware Chancery Again Rejects Merger Price and Awards Premium

Posted in Award Premium, Closely Held Target, Discounted Cash Flow Analysis, Discounted Net Income Analysis, Equity Risk Premium, Guideline Public Company Valuation, Independent Valuation, Merger Price, Perpetuity Growth Rate, Precedent Transactions

In Farmers & Merchants Bancorp, an appraisal case involving a small closely-held community bank that was sold in a stock-for-stock deal valued at $83 per share, Chancellor Bouchard disregarded merger price, as well as the “wildly divergent valuations” of both sides’ experts.  He arrived at an independent valuation of $91.90 per share based on his… Continue Reading

Blow Provisions: A Threat to Appraisal?

Posted in Appraisal Conditions, Blow Provisions

We posted recently about attempts by M&A buyers to include a closing condition in the merger agreement that would relieve the buyer from closing if a triggering percentage of appraisal rights are exercised.  As an illustration of such a condition, CBOE Holdings — which owns the Chicago Board Options Exchange — succeeded in including a so-called… Continue Reading