Merion Capital LP & Merion Capital II LP v. BMC Software

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October 21, 2015

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7372 Prepackaged Software
shareholder dissent/oppression
expert testimony, fair value, discounted cash flow (DCF), merger, statutory appraisal, reliability, synergy, projections, equity risk premium (ERP), comparable companies method
Merion Capital LP & Merion Capital II LP v. BMC Software
2015 Del. Ch. LEXIS 268
US
State Court
Delaware
Court of Chancery
Borris J. Steffen (petitioners); Richard S. Ruback (company/respondent)
Glasscock

Summary

Chancery favors merger price, without synergy adjustment, over DCF-generated value, noting uncertainties over key inputs such as projections, equity risk premium, terminal growth rate as well as the “wildly divergent” DCF results of the parties’ experts.
Merion Capital LP & Merion Capital II LP v. BMC Software
PDF, Size: 314 KB

See Also

Uncertainty Over Key Inputs Compromises DCF, Chancery Says

Legal and Court Case Update
January 2016

Chancery favors merger price, without synergy adjustment, over DCF-generated value, noting uncertainties over key inputs such as projections, equity risk premium, terminal growth rate as well as the “wildly divergent” DCF results of the parties’ experts.

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BVR Guide to Management Projections and Business Valuation: Analysis and Case Law