Entitlement to Appraisal

Does the existence of the appraisal remedy, and its use, have an effect on arbitrage spreads? If the appraisal remedy results in lower arbitrage spreads, then one can conclude that shareholders writ large are benefiting from the appraisal remedy – the argument advanced by Professors Brian Broughman, Audra Boone, and Antonio Macias in their piece

The National Law Review has covered Mobile Posse, a case we’ve posted on before.  The NLR analysis describes the Mobile Posse decision, writing:

“The Court denied all but one of defendants’ motions, finding numerous deficiencies in the notice process and finding that the merger was not entirely fair.”

And further:

“The Court was

We’ve covered the Mobile Posse case before, specifically, how it shows the importance of getting the basics right regarding appraisal notices. The Delaware Litigation blog provides more on Mobile Posse, including a recap of whether a post-suit “do over” is available:

“The company sought a “do-over” or a mulligan for its statutory errors

The State Board of Administration of Florida’s proxy guidelines join a number of others in suggesting that investors vote FOR appraisal rights when available. For institutional investors, appraisal rights are a critical shareholder protection, especially in instances where the merger process raises questions or where market dislocation results in a value gap between merger and

We’ve covered before that major proxy voting analyst Taft-Hartley suggests investors vote in favor of appraisal rights and that a major pension fund’s guidelines likewise favor appraisal. Add Boston Partners, a major investment manager, to the list of those favoring appraisal rights in their proxy voting, according to their 2019 proxy voting guidelines [.pdf].

Appraisal rights can offer investors critical protections against corporate actions that do not provide shareholders fair value. Investors often recognize this – as we recently posted, proxy voting guidelines suggest investors vote in favor of appraisal. And then there are the Corporate Governance Principles [.pdf] of the Los Angeles County Employees Retirement Association (LACERA),