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Synergy deduction purely academic in new Delaware appraisal ruling

In a statutory appraisal case that involved the sale of a publicly traded company to a privately held entity, the Delaware Court of Chancery recently decided the deal price was a reliable indicator of fair value and a downward adjustment for synergies was justified.

Delaware Court of Chancery says no to expert’s novel approach to beta calculation

In an appraisal proceeding in which the Delaware Court of Chancery favored the discounted cash flow analysis as the means with which to determine fair value, the court had sharp words for the company expert’s decision to introduce a new way for calculating equity beta.

Untested beta calculation KOs expert’s credibility and fair value conclusion

In a statutory appraisal case with several twists, the Delaware Court of Chancery recently agreed with the parties’ experts that a discounted cash flow analysis was the only way to determine fair value while rejecting, unequivocally, the company expert’s novel approach to calculating beta.

In re Panera Bread Company

In appraisal action involving sale of public company, court says sale process had “objective indicia of reliability,” justifying use of deal price for fair value determination; synergy deduction is appropriate to account for value from anticipated cost and tax-related savings due to merger.

Court Considers Deal Price Persuasive Indicator of Fair Value and Approves Synergy Deduction

In appraisal action involving sale of public company, court says sale process had “objective indicia of reliability,” justifying use of deal price for fair value determination; synergy deduction is appropriate to account for value from anticipated cost and tax-related savings due to merger.

Manichaean Capital, LLC v. SourceHOV Holdings, Inc.

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.

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.

Highlights of 2019 Delaware Valuation Decisions

This year to date has been another active period for valuation cases in the Delaware courts. Six cases are reviewed and the predominant theme is that, in arm’s-length transactions, appraisal value continues to be based primarily on the transaction price rather than on discounted cash flow.

Columbia Pipeline ruling highlights terminal value flaw in expert’s DCF

In the Columbia Pipeline statutory appraisal action, the Delaware Court of Chancery recently rejected the petitioner expert’s discounted cash flow analysis to determine fair value and, in a short but noteworthy discussion, explained why the court has come to question the usefulness of the DCF in many instances.

Deal price prevails in yet another Delaware statutory appraisal ruling

Nine days after his ruling in Columbia Pipeline, Vice Chancellor Laster again found the deal price was the most reliable indicator of fair value in a statutory appraisal case involving a publicly traded mining company.

Court Says Corrected DCF Still Supports Original Fair Value Determination

Responding to petitioners’ motion for reargument, court concedes and corrects errors in court’s original DCF analysis but finds corrected DCF model still corroborates the original fair value determination; court affirms its reliance on unaffected market price as fair value indicator.

In re Appraisal of Jarden Corp. (II)

Responding to petitioners’ motion for reargument, court concedes and corrects errors in court’s original DCF analysis but finds corrected DCF model still corroborates the original fair value determination; court affirms its reliance on unaffected market price as fair value indicator.

Unadjusted deal price best represents fair value, Court of Chancery says

In a statutory appraisal case featuring a publicly traded company, the Court of Chancery, after an exhaustive evaluation of the sale process, found the deal price was the best evidence of fair value.

Despite Less-Than-Optimal Sale Process, Court Relies on Deal Price for Fair Value

In statutory appraisal of public company, court relies on deal price; presigning sale process was “suboptimal,” but post-signing market check was “effective”; there was an argument for upward adjustment to deal price based on an increase in the company’s value between merger announcement and deal closing.

In re Stillwater Mining Co. 2017 0385 JTL

In statutory appraisal of public company, court relies on deal price; presigning sale process was “suboptimal,” but post-signing market check was “effective”; there was an argument for upward adjustment to deal price based on an increase in the company’s value between merger announcement and deal closing.

In re Appraisal of Columbia Pipeline Grp., Inc.

In statutory appraisal action featuring publicly traded company, court relies on deal price for fair value; although flawed, sale process, when compared to process in three key high court decisions endorsing deal price, does not undermine validity of deal price; no adjustment for synergies.

Court Endorses Unadjusted Deal Price as Fair Value Indicator Despite Flaws in Sale Process

In statutory appraisal action featuring publicly traded company, court relies on deal price for fair value; although flawed, sale process, when compared to process in three key high court decisions endorsing deal price, does not undermine validity of deal price; no adjustment for synergies.

Court of Chancery favors unaffected market price over other fair value indicators (Part 2)

When the Delaware Court of Chancery recently decided to rely on the unaffected market price for fair value, in a major statutory appraisal case, it provided an in-depth critique of the experts’ traditional valuation analyses, which valuators want to be familiar with.

Court of Chancery favors unaffected market price over other fair value indicators (Part 1)

In a freshly minted ruling, the Delaware Court of Chancery said the unaffected market price was the most reliable indicator of fair value in a big statutory fair value case.

In re Appraisal of Jarden Corp. (I)

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.

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.

Delaware Supreme Court Reproves Chancery’s Use of Unaffected Market Price in Aruba

Delaware Supreme Court overturns Court of Chancery’s fair value determination based on unaffected market price and awards petitioners deal price minus synergies as determined by company; trial court’s analysis rested on “inapt” agency-costs theory and raised due process and fairness concerns.

Verition Partners Master Fund Ltd. v. Aruba Networks, Inc. (Aruba III)

Delaware Supreme Court overturns Court of Chancery’s fair value determination based on unaffected market price and awards petitioners deal price minus synergies as determined by company; trial court’s analysis rested on “inapt” agency-costs theory and raised due process and fairness concerns.

Kendall Hoyd & Silver v. Trussway Holdings

Delaware Court of Chancery finds DCF analysis is the best way to achieve fair value in a statutory appraisal case arising out of a contested merger; court’s analysis leans heavily on company expert’s analysis regarding contested inputs, including projections, beta, and terminal value.

Court Chooses DCF to Determine Fair Value in ‘Straightforward’ Appraisal Case

Delaware Court of Chancery finds DCF analysis is the best way to achieve fair value in a statutory appraisal case arising out of a contested merger; court’s analysis leans heavily on company expert’s analysis regarding contested inputs, including projections, beta, and terminal value.

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