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Flaws in North Carolina Court’s Appraisal of Reynolds American

The wrong valuation date, a faulty reliance on other cases and the disregard of projections highlight the court’s opinion in a shareholder dissent case involving two tobacco giants.

North Carolina court looks to deal price for fair value in tobacco merger

The importance of Delaware appraisal jurisprudence beyond state borders was on display in a recent fair value decision out of North Carolina related to a merger involving the tobacco giant Reynolds.

Reynolds American Inc. v. Third Motion Equities Master Fund Ltd.

In appraisal action involving merger of public (tobacco) company, court, guided by key Delaware court decisions, says deal price best reflects fair value and represents upper limit; contemporaneous valuations based on comparable companies, precedent transactions, and DCF support use of deal price.

North Carolina Court Says Deal Price Represents Upper Limit of Tobacco Company’s Fair Value

In appraisal action involving merger of public (tobacco) company, court, guided by key Delaware court decisions, says deal price best reflects fair value and represents upper limit; contemporaneous valuations based on comparable companies, precedent transactions, and DCF support use of deal price.

Recent Cases from the Delaware Chancery: What Appraisers Need to Know Now

Join Bill Kennedy for a summary of key valuation issues ruled on by the Delaware Chancery and Delaware Supreme Court. Get coverage of recent cases and discover trends seen in the courts. Learn how the courts have treated the different valuation methods in recent cases, as well as factors to consider when applying the methods. No matter where you practice, the takeaways from this session will help valuation professionals deliver a quality, litigation-ready report.

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.

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.

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.

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.

Delaware Chancery explains logic behind use of market price in Aruba case

After the petitioners in a statutory appraisal action recently lost big, they undertook a multifaceted assault on the Delaware Court of Chancery’s decision to use the unaffected market price as the indicator of value. Their motion for reargument went nowhere.

Court of Chancery disregards deal price where sales process is not ‘Dell compliant’

Recent rulings from the Delaware Supreme Court make it seem as if the discounted cash flow analysis has lost its top ranking among valuation methodologies in statutory appraisals involving publicly traded companies. Not exactly.

Court of Chancery exalts stock price as most accurate indicator of fair value

The Delaware Court of Chancery recently had an opportunity to put into practice the directives the state’s high court had issued in DFC Global and Dell in terms of calculating fair value in a statutory appraisal proceeding.

Delaware Supreme Court balks at Court of Chancery’s Dell decision

Twice, in 2017, the Delaware Supreme Court struck down statutory appraisal rulings by the Delaware Court of Chancery that dismissed the importance of the market price.

Chancery’s fusion valuation triggers remand and some words of wisdom by Del. Supreme Court

The Delaware Supreme Court recently overturned a 2016 ruling by the Delaware Court of Chancery that arrived at fair value by weighting the results of three valuation techniques equally. The high court's Chief Justice Strine, who once headed the Chancery, found this approach was problematic and used the decision to provide valuation advice to his successor, Chancellor Bouchard, who had overseen the appraisal proceeding.

"Deal Price" vs. "Equity Price"

Your Pratt's Stats transaction records show both a deal price and equity price along with the corresponding pricing multiples.  Which is the appropriate ratio to use in comparing my sub ...

Fruitful subjects to research

I am a Ph.D. student at Walden University and wish to study a contemporary problem in business valuation as my dissertation topic. I would appreciate if you could recommend some topics tha ...

Consolidation IPO creates liquidity for new company

We brought you an example of a "consolidation IPO" in the medical field last year (see Spotlight Valuation, 5/96 p. 3), and here's one in the travel industry. The general idea is that a group of small ...

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