Law360 has published this analysis of the advantages and disadvantages of various structuring options when dealing with a British Virgin Islands acquisition. Notable to appraisal is the diversity of appraisal rights/dissenters; rights offered (or not offered) in the various structuring options. For example, if using a “merger” of “tender offer,” the article details that appraisal rights are available, except in certain specific instances. But if using a “scheme of arrangement” – a form of court-supervised combination – appraisal rights are only available if allowed by the court.
Consideration of appraisal rights in deciding what kind of legal process a company will engage in to effectuate its merger is not new. We have seen similar issues with Cayman appraisal, and in the U.S., the 2018 Dr. Pepper decision suggested the possibility of more U.S. companies using a reverse triangular merger to avoid appraisal rights (though some commentators argued this would not occur).
Appraisal rights/dissenters’ rights and choosing the correct form of acquisition arrangement are intimately connected – apparently in the BVI as well.