We’ve posted before that appraisal has multiple factors: appraisal can be a valuable tool for investors seeking additional returns; it can fit within a larger strategy around a merger; and appraisal itself can be a consideration for deal-professionals looking at merger structure, concerned about quasi-appraisal remedies, or those determining the mechanical steps necessary for a merger.
A recent guide published by Latham & Watkins reviews the US merger process (mostly from the acquirer point of view) and highlights how appraisal consideration should be part of the merger review process. The guide goes over what Latham considers common shareholder litigation related to mergers, focusing on pre-merger suits and appraisal actions Appraisal is, of course, a post-merger remedy not available on a “class” wide basis, but instead available only to dissenting investors who demand appraisal.
Like other items in the guide, the possibility of appraisal (including whether appraisal rights apply in the transaction at issue, or whether acquirer shareholders have appraisal rights…) is something that deal-professionals must take into account as they work on the merger. Deal strategy can take into account appraisal, and appraisal-related considerations. Further, by taking into account the possibility of post-merger appraisal actions from the very start, deal-professionals can seek to reduce or avoid the kinds of process problems that courts have focused on in numerous appraisal cases.