Another Nail in the Coffin for Arm’s-Length Merger Appraisal Cases Without Fatal Process Flaws–Delaware Supreme Court Embraces the Merger-Price-Less-Synergies Approach for Determining “Fair Value”–<em>Aruba</em>

Another Nail in the Coffin for Arm’s-Length Merger Appraisal Cases Without Fatal Process Flaws–Delaware Supreme Court Embraces the Merger-Price-Less-Synergies Approach for Determining “Fair Value”–Aruba


By: Andrew J. Colosimo, Warren S. de Wied, Steven Epstein, Christopher Ewan, Arthur Fleischer, Jr., Andrea Gede-Lange, David J. Greenwald, Erica Jaffe, Randi Lally, Mark H. Lucas, Scott B. Luftglass, Brian T. Mangino, Shant P. Manoukian, Amber Meek, Philip Richter, Steven G. Scheinfeld, Robert C. Schwenkel, David L. Shaw, Peter L. Simmons, Matthew V. Soran, Steven J. Steinman, Gail Weinstein, Maxwell Yim

In Verition v. Aruba (April 16, 2019), the Delaware Supreme Court fully embraces the concept (which is statutorily mandated but historically has been mostly ignored) that, when the court relies on the deal price to determine appraised fair value, the value of expected merger synergies included in the deal price must be excluded from the fair value determination. While the Supreme Court's appraisal result in Aruba is higher than the Court of Chancery's result was, it is still well below the merger price--thus, the dissenting stockholders still will experience a “loss” as a result of having exercised their appraisal rights rather than accepting the merger consideration. The deal-price-less-synergies approach can be expected to further accelerate the recent significant decline in appraisal petitions involving arm's-length mergers without seriously flawed sale processes. The attached Briefing analyzes the decision and offers related practice points.

Additional Information
publications-detail.inc