Chancery Rejects Deal Price Based on Unquantifiable ‘Sales Process Mispricing’

Business Valuation UpdateVol. 22 No. 8
Legal and Court Case Update
August 2016
5045 Computers and Computer Peripheral Equipment and Software
423430 Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
dissenting shareholder
expert testimony, fair value, breach of fiduciary duty, buyout, discounted cash flow (DCF), dissenting shareholder, going concern, merger price, statutory appraisal, projections, equity risk premium (ERP), revenue forecasts

In re Appraisal of Dell Inc.
2016 Del. Ch. LEXIS 81
May 31, 2016
US
State Court
Delaware
Court of Chancery of Delaware
Prof. Bradford Cornell (petitioners); Prof. Glenn Hubbard (respondents)
Laster

Summary

For statutory appraisal, Chancery says sales process related to management buyout “functioned imperfectly as a price discovery tool” and gives no weight to final merger price; court relies exclusively on DCF analysis to derive fair value of the company.

See Also

In re Appraisal of Dell Inc.

For statutory appraisal, Chancery says sales process related to management buyout “functioned imperfectly as a price discovery tool” and gives no weight to final merger price; court relies exclusively on DCF analysis to derive fair value of the company.