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
In this paper, published in 2015 in Investment Management and Financial Innovations, the authors examined multiple valuation methods for a specific data set: in this case, Slovakian mining companies. Comparing multiple valuation methods, including a discounted cash flow, economic value, and iterative approach, the authors note that the DCF yielded the lowest valuation, whereas
Commentary on the recent Jarden decision has focused, unsurprisingly, on the use of unaffected stock price in the decision after some commentators viewed the methodology as dead after Aruba. As a recap, unaffected stock price methodology involves determining the fair value of an acquired company using its stock price before the merger announcement.
By a July 19, 2019 ruling, Vice Chancellor Slights set the fair value of Jarden Corporation at its unaffected market price of $48.31, below the $59.21 per share value of cash and stock that Newell Rubbermaid had paid to acquire it. The court also performed a DCF analysis that corroborated its valuation. The court
The Cornerstone Report finds that despite concerns over “the subjectivity of DCF models,” the methodology remains the primary tool for valuing targets in a Delaware appraisal. Petitioners continue to “overwhelmingly” rely on DCF analyses (94% of the cases) while occasionally also providing a comparables analysis (35% of the cases). Respondents continue to rely on DCF
Vice Chancellor Glasscock issued yesterday this AOL ruling on reconsideration, lowering his prior $48.70 determination to $47.08 — going farther below the $50 merger price — on the basis that he had overvalued one of AOL’s pending transactions in his DCF analysis.
The court prefaced its ruling by expressing its displeasure at both parties
The Delaware Court of Chancery just issued two new appraisal rulings:
On April 23, 2018, the Delaware Supreme Court affirmed last July’s Chancery court ruling in the Clearwire case. This decision ends the appeal by Clearwire shareholders looking to overturn the lower court decision finding that Clearwire was worth $2.13 per share, below the $5 merger price. When the Supreme Court, or any appellate court,
In this article, Fried Frank LLP attorneys discuss the three appraisal decisions since the Delaware Supreme Court’s decision in Dell – Aruba, AOL and SWS. The article notes that while the Supreme Court in Dell directed the Chancery Court to consider the deal price and accord it appropriate weight, these three decisions
On Friday, Vice Chancellor Glasscock issued his ruling in the AOL appraisal case. The court first set out to determine whether the merger transaction was “Dell Compliant,” which the Court defined to be “[w]here information necessary for participants in the market to make a bid is widely disseminated, and where the terms of the transaction