Appraisal is Pro-Investor

Proxy firm Institutional Shareholder Services (ISS) offers a number of proxy guidelines for specific funds, kinds of funds and separate interest groups. We recently wrote about ISS’s sustainability guidelines, which recommend voting in favor of appraisal rights. ISS also provides recommendations for Catholic funds and related entities. Per ISS: “Catholic Advisory Services Recommendation:

In a recent appraisal decision, Delaware Vice Chancellor Slights III awarded investors a 12% premium above deal price, fully adopting the discounted cash flow analysis Petitioners tendered, except for one minor adjustment. The case involved a three-way business combination of a privately held target turned public without minority shareholder approval. The court eschewed the use

Proxy firm Institutional Shareholder Services’ Sustainability Proxy Voting Guidelines – 2020 Policy Recommendations are public, and include a recommendation that shareholders vote in favor of appraisal rights when they are on the ballot.

ISS observes that some investment funds are taking a view towards incorporating various issues into their voting behavior – including corporate governance,

According to this Financial Times report [$$$], shareholder activist campaigns targeted at M&A activity were at record levels in 2019, comprising almost half of all activist activity in 2019.

M&A activism can take many forms, but perhaps of most interest to those also interested in appraisal is activism that focuses on already announced deals.  A

Investment manager Russell Investments’ proxy guidelines lay out that the manager will “vote for proposals to restore, or provide shareholders with, rights of appraisal[.]” This, despite the same guidelines setting out a general rule that Russell will vote for mergers themselves if Glass Lewis suggests a “for” vote, except for case by case instances. This

Domini Investment Trust is a “women-led SEC registered investment adviser specializing exclusively in impact investing.” Domini’s proxy voting guidelines for 2019 set out that while Domini analyzes mergers on a “case-by-case” basis, it will vote for appraisal rights proposals. As we’ve blogged about before, and will be covering this month, investors’ proxy guidelines often favor