Chancery’s DCF Upends Appraisal Arbitrage Strategy

Business Valuation UpdateVol. 23 No. 9
BVLaw Case Update
September 2017
6712 Offices of Bank Holding Companies
551111 Offices of Bank Holding Companies
dissenting shareholder
beta, expert testimony, fair value, size premium, cash flow, discounted cash flow (DCF), merger, statutory appraisal, projections, capital asset pricing model (CAPM), fairness opinion, equity risk premium (ERP), excess working capital

In re Appraisal of SWS Group, Inc.
2017 Del. Ch. LEXIS 90
May 30, 2017
US
State Court
Delaware
Court of Chancery
David Clarke (petitioners); Richard Ruback (company-respondent)
Glasscock

Summary

In statutory appraisal, Chancery relies solely on DCF analysis, noting the instant case involving a bank holding company raises a unique situation in terms of management projections and whether and how to account for creation of excess regulatory capital.

See Also

Chancery’s DCF Upends Appraisal Arbitrage Strategy

In statutory appraisal, Chancery relies solely on DCF analysis, noting the instant case involving a bank holding company raises a unique situation in terms of management projections and whether and how to account for creation of excess regulatory capital.