Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd., 2017 Del. LEXIS 518 (Del. Dec. 14, 2017)

By instructing the court to “take into account all relevant factors” in determining fair value, the statute requires the Court of Chancery to give fair consideration to “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court.” Given that “[e]very company is different; every merger is different,” the appraisal endeavor is “by design, a flexible process.”

This Court has relied on the statutory requirement that the Court of Chancery consider “all relevant factors” to reject requests for the adoption of a presumption that the deal price reflects fair value if certain preconditions are met, [*40] such as when the merger is the product of arm’s-length negotiation and a robust, non-conflicted market check, and where bidders had full information and few, if any, barriers to bid for the deal.

… Further, the Court of Chancery’s analysis ignored the efficient market hypothesis long endorsed by this Court. It teaches that the price produced by an efficient market is generally a more reliable assessment of fair value than the view of a single analyst, especially an expert witness who caters her valuation to the litigation imperatives of a wellheeled client.

… Fair value entails at minimum a price some buyer is willing to pay—not a price at which no class of buyers in the market would pay.

When an asset has few, or no, buyers at the price selected, that is not a sign that the asset is stronger than believed—it is a sign that it is weaker. This fact should give pause to law-trained judges who might attempt to outguess all of these interested economic players with an actual stake in a company’s future. This is especially so here, where the Company worked hard to tell its story over a long time and was the opposite of a standoffish, defensively entrenched target as it approached the sale process free of many deal-protection devices that may prevent selling companies [*73] from attracting the highest bid. Dell was a willing seller, ready to pay for credible buyers to do due diligence, and had a CEO and founder who offered his voting power freely to any topping bidder.

(footnotes omitted)

via Wachtell Lipton

Professors Weigh In On DFC Global Appeal

〔2017年1月1日追記〕

The Law Professors admit that they “have no financial interest or direct personal interest in this case.” Mot. ¶ 1. Rather, they are interlopers desperately seeking a forum in which they can pursue their academic fantasy by suggesting that this Court rewrite Delaware’s judicial appraisal statute, 8 Del. C. § 262(h), and effectively overrule settled law concerning the Chancery Court’s broad discretion in determining the fair value of dissenting stockholders’ shares in an appraisal action.

〔2017年1月9日追記〕

via Lowenstein Sandler, Lowenstein Sandler

Merion Capital, LP, et al. v. Lender Processing Services, Inc., C.A. No. 9320-VCL, memo. op. (Del. Ch. Dec. 16, 2016)

取引価格(合併価格)への回帰ということで。

“… [T]the figure of $38.67 per share is my best estimate of the fair value of the Company based on the DCF method.

… As noted, a DCF analysis depends heavily on assumptions. Under the circumstances, as in [Merlin Partners, LP, et al. v. AutoInfo, Inc., C.A. No. 8509-VCN, memo. op. (Del. Ch. Apr. 30, 2015),] and [Merion Capital, LP, et al. v. BMC Software, Inc., C.A. No. 8900-VCG, memo. op. (Del. Ch. Oct. 21, 2015)], I give 100% weight to the transaction price.”

Evaluating the reliability and persuasiveness of the deal price for purposes of establishing fair value in an appraisal proceeding is a multifaceted, fact-specific inquiry. The relevant factors can vary from case to case depending on the nature of the company, the overarching market dynamics, and the areas on which the parties focus. The last is perhaps an underappreciated aspect of appraisal jurisprudence. Because an appraisal decision results from litigation in which adversarial parties advance arguments and present evidence, the issues that the court considers and the outcome that it reaches depend in large part on the arguments that the advocates make and the evidence they present. An argument may carry the day in a particular case if counsel advance it skillfully and present persuasive evidence to support it. The same argument may not prevail in another case if the proponents fail to generate a similarly persuasive level of probative evidence or if the opponents respond effectively.

via Lowenstein Sandler, The Chancery Salvo