Business Valuation Update
- How to Review a Report’s Valuation Methodology
- Ideas for Solving Two Problems in the BV Profession
- How Do Your Firm’s Benefits Stack Up?
- Using Rule of Thumb Data to Uncover Cooked Books
Yet Again, Delaware Looks to DCF in Appraisal Action
PNC Financial Services Group Inc. (PNC), the parent of PFPC Holding Corp. (Holding), had planned to take Holding’s subsidiary, PFPC Worldwide Inc. (PFPC), public via an initial public offering (IPO), but the opportunity did not arise.
Arm’s-Length Merger Price Less Synergies Equals Fair Value
The issue in this case was the fair value of the shares of a bank holding company for purposes of appraisal rights following a merger.
Delaware Chancery Questions ‘Relative’ Valuation by Goldman Sachs That ‘Obscured’ Market Facts
Delaware Chancery finds merger process and price tainted by “relative” DCF valuations that obscured “real world” market values and orders $1.3 billion in damages, based on its own calculation of DCF of acquired company.
Chancery court charts own course in appraisal action
The issue in this appraisal action was the value of the shares of eMachines Inc., a company that provided low-cost computer goods to consumers.
Aversion to 'Costly Appraisal' Lands Majority in Court: 'Transaction Method' Carries the Day
The issue in this appraisal action was the value of Montgomery Cellular (MCHC), a telecommunications holding company.
Must-Read Opinion From Chancery Court on Tax Affecting, DCF Discounts, and More
“Must-read” opinion from Delaware Chancery Court on tax affecting, DCF discounts, and more.
Chancery Rejects Deal Price Based on Unquantifiable ‘Sales Process Mispricing’
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.
Delaware Chancery Rejects DCF Analysis in Insurance Company Appraisal
Delaware Chancery Court favors “shared synergies” and actuarial analysis in the fair value appraisal of an insurance conglomerate’s merger.
Chancery Validates Tax Affecting in Fair Value Case
In statutory appraisal, Chancery affirms need for tax affecting in calculating projected free cash flows for DCF model; “operative metric” under Kessler model is amount of funds available for distribution to shareholders, not actual distributions made.
Chancery Trusts DCF to Home In on Common Stock Value
Court of Chancery finds the defendant directors proved “entire fairness” despite a management incentive plan and large liquidation preference that rendered the sales process unfair to common stockholders and left them with no proceeds; defendant expert’s ...
Financial Advisor’s ‘Real Client Was the Deal,’ Says Chancery
Chancery says “dropdown” of assets from parent to master limited partnership resulted in overpayment; transaction was enabled by financial advisor that took orders from parent regardless of whether opinion “made sense as a matter of valuation theory.”
DE Chancery Favors Supply-Side ERP, Rejects Size Premium ‘Liquidity Adjustment’
Delaware Court of Chancery prefers supply-side equity risk premium over historical ERP in statutory appraisal action, but rejects “novel” liquidity adjustment to size premium.
More Valuation Data Do Not Ensure Fair Class Action Settlement
In stockholder class action, Chancery declines to approve settlement that requires plaintiffs to agree to broad release of claims in exchange for additional valuation-related information, finding it fails to meet applicable “fair and reasonable” standard.
Pitfalls in fairness opinion valuations
This article is excerpted from a longer paper prepared by Gil Matthews for presentation at the ABA Family Law Section's National Business Valuation Conference to be held May 3-5 in San Francisco, Cali ...
First Step of a Two-Step Transaction Culminating in a Merger Fully Considered in Fair Value Determination
The Delaware Court of Chancery determined the fair value of publicly held stock in this dissenting shareholders’ action.
Management’s Projections Figure Heavily in Dissenting Shareholder Action
The Delaware Court of Chancery determined the fair value of Technicolor Inc. in this dissenting shareholder action.
Chancery Relies on DCF Where Deal Process Is Not ‘Dell Compliant’
In statutory appraisal, court finds sales process was not “Dell compliant” and declines to assign any weight to deal price; court agrees with parties’ experts that DCF best captures fair value on valuation date and arrives at final value below deal price.
Novel Beta Method Occasions Rebuke From Court of Chancery in Appraisal Case
In appraisal proceeding, Court of Chancery adopts petitioner expert’s DCF-based model for calculating fair value, making slight adjustment to expert’s size premium; on beta calculation, court finds respondent expert’s novel approach “does not survive judicial scrutiny” and raises Daubert issues.
Court of Chancery Rules Unaffected Market Price Is Best Evidence of Fair Value
Court finds record shows unaffected market price is best evidence of fair value; court says company expert’s efficient market analysis and event study provide strong support for use of market price; court’s own DCF analysis generates value close to market price, thus corroborating market price.