In the wake of the Dell appraisal ruling in May 2016, perceived appraisal risk has increased, believes Professor Guhan Subramanian (Harvard Business School). He was one of the Dell stockholders’ experts in that case, which focused on the M&A deal process. The professor has proposed that courts adopt a presumption that the merger price represents fair value in an appraisal proceeding if the deal process involved “an adequate market canvass, meaningful price discovery, and an arm’s-length negotiation.” If the deal process does not have these features, the deal price should receive no weight, he says. His “synthesizing principle” approach represents a middle ground between the competing approaches 29 law, economics, and finance professors advanced in the DFC Global appraisal, which is currently on appeal to the Delaware Supreme Court. Subramanian’s paper is “Using the Deal Price for Determining ‘Fair Value’ in Appraisal Proceedings.”
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