Importance of fairness opinions stressed at Transaction Advisors M&A Conference

BVWireIssue #165-3
June 22, 2016

BVR had the good fortune to partner with and attend the Transaction Advisors M&A Conference last month in San Francisco. A deep-dive feature was a panel on “Valuation Trends and Fairness Opinions” led by Chris Janssen, a managing director at Duff & Phelps. On the panel were Michael O’Bryan, Esq., a partner at Morrison & Foerster, and Ra’ed Elumurib, investor and advisor and the former EVP of corporate development at PMC-Sierra.

A must-read case: All discussion points led back to In re Trados Inc., a seminal 2013 case in which the Delaware Court of Chancery highlighted the value (and necessity) of obtaining a fairness opinion in a merger or acquisition.  BVLaw’s case digest is available to readers as a complimentary download. In re Trados makes for a riveting read for many reasons, not the least of which is the Chancery’s clear and plain reprimand because of a complete disregard for common shareholders. The common shares were ultimately deemed worthless after the merger because they had been proven worthless (due to zero growth prospects for the target company).  But Janssen highlighted the court’s observations that the “directors had not even thought about [common shareholder] issues; at least designate a few people to think about it!” O’Bryan added that “common shareholders didn’t get the attention they should have.” Eric Nath (Eric Nath & Associates LLC) exchanged observations with Elumurib on the rates of return he uses on deals and how he derives them, especially when working with financial projections from management.

Watch it: You can watch a video of this session—and all the conference sessions—if you click here.

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