Huff Fund Inv. P’ship v. CKx, Inc., 2014 Del. Ch. LEXIS 82 (May 19, 2014)
The Delaware Court of Chancery caused a bit of a stir last year when it decided that the merger price was the most reliable measure of fair value in a statutory appraisal action involving an unusual company with hard-to-value entertainment assets. Then, vice chancellor Glasscock found “few, if any” synergies in the transaction. But to be sure the merger price did not include any prohibited “speculative elements of value” arising from the merger or did not exclude elements of value that it should capture, he allowed the parties to argue for adjustments.
In the most recent stage of the case, not surprisingly, the company wanted a downward adjustment, claiming the merger price incorporated synergies, and the dissenting shareholders wanted an upward modification based on “unexploited business opportunities” that allegedly were not accounted for in the merger price. The court approached both arguments with skepticism.