Merion Capital L.P. v. Lender Processing Servs.
In appraisal action, Chancery says final merger consideration best represents fair value, noting sales process led to “meaningful price discovery”; court says with DCF too much depends on assumptions; small changes may have outsize impact on value range.
Chancery Says Solid Sales Process Lends Credibility to Deal Price
In appraisal action, Chancery says final merger consideration best represents fair value, noting sales process led to “meaningful price discovery”; court says with DCF too much depends on assumptions; small changes may have outsize impact on value range.
Uncertainty Over Key Inputs Compromises DCF, Chancery Says
Chancery favors merger price, without synergy adjustment, over DCF-generated value, noting uncertainties over key inputs such as projections, equity risk premium, terminal growth rate as well as the “wildly divergent” DCF results of the parties’ experts.
Adjusted Merger Price Superior to Other Valuation Methods
In appraisal arbitrage case, Chancery finds merger price adjusted for synergies is best indicator of fair value of company; dissenter’s DCF value rests on unsound management projections and its comparable transactions analysis uses too few data points.
Merion Capital LP & Merion Capital II LP v. BMC Software
Chancery favors merger price, without synergy adjustment, over DCF-generated value, noting uncertainties over key inputs such as projections, equity risk premium, terminal growth rate as well as the “wildly divergent” DCF results of the parties’ experts.
LongPath Capital, LLC v. Ramtron International Corp.
In appraisal arbitrage case, Chancery finds merger price adjusted for synergies is best indicator of fair value of company; dissenter’s DCF value rests on unsound management projections and its comparable transactions analysis uses too few data points.
Chancery Assigns Secondary Role to Post-Merger DCF
In an appraisal action, Chancery says merger price stemming from robust sales process is best indicator of value; court’s own DCF valuation “is close to the market,” but problematic projections make it more suitable as a check on the sales-derived price.
In re Ancestry
In an appraisal action, Chancery says merger price stemming from robust sales process is best indicator of value; court’s own DCF valuation “is close to the market,” but problematic projections make it more suitable as a check on the sales-derived price.
Court Relies on DCF to Derive Value of ‘Sui Generis’ Company
NY court rejects comparable analyses to value “truly incomparable” beverage company and relies solely on DCF; court says the fact that expressions of interest to buy the company never became bona fide offers indicates liquidity risk and supports 25% DLOM.
Ferolito v. AriZona Beverages USA LLC
NY court rejects comparable analyses to value “truly incomparable” beverage company and relies solely on DCF; court says the fact that expressions of interest to buy the company never became bona fide offers indicates liquidity risk and supports 25% DLOM.
DE Chancery Plumbs Merger Price for ‘Speculative Value Elements’
In statutory appraisal action, Chancery scrutinizes merger price for downward or upward adjustment based on improper inclusion of synergistic value or exclusion of value stemming from business opportunities arising prior to consummation of merger.
Huff Fund Investment Partnership v. CKx, Inc. (II)
In statutory appraisal action, Chancery scrutinizes merger price for downward or upward adjustment based on improper inclusion of synergistic value or exclusion of value stemming from business opportunities arising prior to consummation of merger.
The Effect of Goodwill in Determining the Value of a Business in a Divorce
Randall B. Wilhite. Family Law Quarterly , Vol. 35, No. 2, Summer 2001. This article, also part of the family law symposium on valuation issues, contains six major sections, includin ...
M&A synergies
Measuring Synergies in Valuation for M&A , Frank C. Evans and David M. Bishop , Valuation Strategies , May/June 2001, pp. 36-41. Synergy has taken on an almost mythical reputation in the ...
Identifying pool of willing buyers may introduce synergy to fair market value
How many times have we, valuation consultants, read the definition of fair market value 1 and then arrived at an opinion of value without focusing on the characteristics of the "willing buyer"?
Other Articles - March 2000
"Assessing the Impact of Synergy on Value," Mark L. Zyla, CPA Expert, Fall 1999, pp. 5-7. "Auto Dealer Consolidation: The Impact on Valuations," Timothy W. York and James L. "Butch" Williams ...
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 ...
Quaker Oats sells Snapple at a $1.4 billion loss
The recent Quaker Oats/Snapple debacle is a giant and highly visible example of an extremely prevalent syndrome: overpayment for acquisitions based on hoped-for results that are never realized ...
A View from the Street: How Wall Street's valuation approaches differ from independent fee appraisers
In this interview Gil and Mark share insights as to how Wall Street investment bankers' business valuation perspectives and methods differ from those typical of independent business valuation firms ...