Download or read book Fairness Opinions written by Andrew Smith and published by Andrew Smith. This book was released on 2008-04-03 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: Fairness Opinions A fairness opinion, by definition, is a letter prepared by an experienced investment banker, or business appraiser, that states whether or not a transaction'from a financial point of view'is fair. The fairness opinion speaks to the ?fairness? of the financial terms of a transaction, as of a specific date, and given a set of assumptions.1 ?Fairness? in this context, parallels the notions of unbiased, impartial, and just. As denoted by the colloquial term ?fair play? or the business phrase ?an arm's length transaction,? a fairness opinion represents whether a deal is fair to shareholders, particularly a company's minority shareholders, all material matters and circumstances considered.
Download or read book Are Fairness Opinions Fair The Case of Mergers and Acquisitions written by Darren J. Kisgen and published by . This book was released on 2009 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 1994 to 2003, 80% of targets and 37% of acquirers obtain a third-party assessment of the fairness of a merger or acquisition. These fairness opinions do not affect deal outcomes when used by targets, but they affect deal outcomes when used by acquirers. The deal premium is lower in transactions if the acquirer obtains a fairness opinion, and further reduced if multiple advisors provide that opinion. However, the acquirer's announcement period return is 2.3% lower if the acquirer has a fairness opinion, especially if the acquirer pays a high premium, indicating that investors are skeptical of these transactions.
Download or read book Fairness Opinions in Mergers and Acquisitions written by and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book An Empirical Analysis of Fairness Opinions in Mergers and Acquisitions written by Huajing Chen and published by . This book was released on 2005 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Investigate the Wealth Effect of Investment Banks and Fairness Opinions They Provide in Corporate Mergers and Acquisitions written by Weishen Wang and published by . This book was released on 2007 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the second chapter, I investigate the wealth implications of fairness opinions that the board of an acquiring firm purchases in corporate mergers from investment banks. Using the propensity score matching method to address the self-selection issue, I find that firms undertaking opinioned mergers under-perform firms with non-opinioned matching mergers in short windows around the announcement date. In the long run, the firms with opinioned merger do not perform better than firms with non-opinioned mergers. The acquiring firms perform poorly relative to their performance before the mergers, irrespective of whether their mergers are opinioned. Over a 12-month window after the mergers, the acquiring firms involved in both opinioned and non-opinioned mergers under-perform matching firms that do not make mergers. These findings are consistent with the hypothesis that the board buys a fairness opinion for its self-protection instead of maximization of shareholder wealth. The implication of this finding is that when investors evaluate mergers, they should focus primarily on deal characteristics, not fairness opinion.
Download or read book The Managerial Incentive to Use Fairness Opinions in Mergers and Acquisitions written by 周柏豪 and published by . This book was released on 2013 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Standard Poor s Guide to Fairness Opinions written by Philip Clements and published by McGraw-Hill. This book was released on 2005-03-14 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Expert guidance on fairness opinions from the experts at Standard & Poor’s The Standard & Poor’s Guide to Fairness Opinions examines fairness opinions from a fiduciary’s perspective. It details important differences between income, market, or cost approaches in rendering an opinion; provides insights into capital structure complexities; describes techniques for achieving vital synergy in the fairness analysis; and more.
Download or read book Elevating the Fairness Opinion Above a Merger Ritual written by James Martin and published by . This book was released on 2006 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many publicly traded companies have chosen a path to growth through merger and acquisition. As part of this strategy, investment bankers and lawyers are commonly hired to assist in the search for merger partners and help navigate the merger process. Still the merger process can be fraught with opportunities for mistakes and potential shareholder litigation. Since the mid-1980's boards of directors have relied upon third party fairness opinions in their quest to limit their litigation exposure in merger transactions. This paper exams [sic] how theses [sic] fairness opinions have become less substantive and more ritualistic and proposes seven areas of suggested improvement.
Download or read book Valuation for M A written by Chris M. Mellen and published by John Wiley & Sons. This book was released on 2018-04-16 with total page 445 pages. Available in PDF, EPUB and Kindle. Book excerpt: Determine a company's value, what drives it, and how to enhance value during a M&A Valuation for M&A lays out the steps for measuring and managing value creation in non-publicly traded entities, and helps investors, executives, and their advisors determine the optimum strategy to enhance both market value and strategic value and maximize return on investment. As a starting point in planning for a transaction, it is helpful to compute fair market value, which represents a “floor” value for the seller since it by definition represents a value agreed upon by any hypothetical willing and able buyer and seller. But for M&A, it is more important to compute investment value, which is the value of the target company to a strategic buyer (and which can vary with each prospective buyer). Prepare for the sale and acquisition of a firm Identify, quantify, and qualify the synergies that increase value to strategic buyers Get access to new chapters on fairness opinions and professional service firms Find a discussion of Roger Grabowski's writings on cost of capital, cross-border M&A, private cost of capital, intangible capital, and asset vs. stock transactions Inside, all the necessary tools you need to build and measure private company value is just a page away!
Download or read book Does the Use of Fairness Opinions Impair the Acquirers Abnormal Returns The Litigation Risk Effect written by Lucy Huajing Chen and published by . This book was released on 2007 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effect of the use of fairness opinions by acquirers on acquirers' short-term market performance. Our paper is the first to examine the effect of using fairness opinions on acquirers' abnormal returns around merger announcements. We hypothesize that acquirers purchase fairness opinions to reduce their potential litigation risk. Our results are consistent with this view that acquirers with fairness opinions underperform those without fairness opinions. The effect is more pronounced in the groups with higher litigation risk. Moreover, acquirers with higher litigation risk are more likely to purchase fairness opinions from investment bankers. Our paper raises the concern over the value of fairness opinions in mergers and acquisitions.
Download or read book U S Mergers and Acquisitions written by Felix Lessambo and published by Palgrave Macmillan. This book was released on 2022-11-17 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A merger or acquisition is one of the most significant events in the life of a firm and the consequences thereof are multi-faceted: Directors’ fiduciary duties, shareholders’ rights, valuation methods, structuring, and financing of the deal, to cite a few. Moreover, it requires an army of savvy professionals (accountants and investment banks, etc.) throughout the process; those understanding the technicalities of M&A guarantees and preventing costly missteps. This book explains the steps, distilling the process of both the legal and financial aspects of M&A, for both students and practitioners.
Download or read book Fairness Opinions and Liability written by Sergei Parijs and published by Kluwer Law International. This book was released on 2005 with total page 231 pages. Available in PDF, EPUB and Kindle. Book excerpt: Fairness opinions have their origin in the United States' mergers and acquisitions practice, but in recent years have also been used in Europe. Fairness opinions can best be defined as an investment banker's assessment of the financial 'reasonableness and equitableness' of a proposed offer for the target company's shareholders. In this clearly written book, Mr.Parijs investigates within the Dutch legal context how and why fairness opinions arise and what they might mean. His concentration lies primarily on fairness opinions of tender offers. Dutch legal literature contains very little on fairness opinions. This book makes the subject accessible to Dutch legal professionals and academicians. One particularly useful aspect of this study is that the author not only makes interesting legal comparisons to important tenets of civil, corporate and securities law, but also to economic theories and valuation methods.
Download or read book Fairness Opinions and SPAC Reform written by Andrew F. Tuch and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the emerging regulatory framework for special purpose acquisition companies (SPACs). According to this framework, mergers of SPACs, known as de-SPACs, must be “fair” to public (or unaffiliated) SPAC shareholders, and transaction participants face heightened liability risk for disclosure errors. In this environment, third-party fairness opinions have been regarded as a de facto requirement for de-SPACs. A study of all fairness opinions used in de-SPACs from 2019 to 2023 shows that these opinions suffer profound methodological problems and fail in their intended purpose. To be fair to public shareholders, a de-SPAC should represent value to these shareholders of at least $10 per share, the amount they would receive if they chose to redeem. This requires a pro forma assessment of the post-merger entity's value, accounting for the effects of dilution, an assessment that will be highly contingent. Nevertheless, most opinions borrowed from the public mergers & acquisitions (M&A) playbook by addressing fairness to the SPAC, rather than to public shareholders, adopting assumptions that often produced implausible valuations while also being unresponsive to fiduciary concerns. Other opinions reflected poor practices, drawing either mistaken or ambiguous conclusions. Another set of opinions expressly purported to address the position of public shareholders. On their face, therefore, they were responsive. But, with one exception, these opinions failed to perform analyses to address the position of public shareholders. While the challenges of assessing fairness to public shareholders can be overcome, fairness opinions should be greeted with skepticism. The article argues in favor of other features of the emerging regulatory framework that would heighten incentives for complete and accurate disclosures of deal value to investors. With stronger incentives to assure complete and accurate disclosures, investment banks, SPAC sponsors, and target companies would be less likely to stand behind de-SPACs in their current form. Incentivizing complete and accurate disclosures, then, should lead to changes in transaction terms and structures that will result in greater fairness to public shareholders.
Download or read book Valuation for M A written by Chris M. Mellen and published by John Wiley & Sons. This book was released on 2018-05-11 with total page 501 pages. Available in PDF, EPUB and Kindle. Book excerpt: Determine a company's value, what drives it, and how to enhance value during a M&A Valuation for M&A lays out the steps for measuring and managing value creation in non-publicly traded entities, and helps investors, executives, and their advisors determine the optimum strategy to enhance both market value and strategic value and maximize return on investment. As a starting point in planning for a transaction, it is helpful to compute fair market value, which represents a “floor” value for the seller since it by definition represents a value agreed upon by any hypothetical willing and able buyer and seller. But for M&A, it is more important to compute investment value, which is the value of the target company to a strategic buyer (and which can vary with each prospective buyer). Prepare for the sale and acquisition of a firm Identify, quantify, and qualify the synergies that increase value to strategic buyers Get access to new chapters on fairness opinions and professional service firms Find a discussion of Roger Grabowski's writings on cost of capital, cross-border M&A, private cost of capital, intangible capital, and asset vs. stock transactions Inside, all the necessary tools you need to build and measure private company value is just a page away!
Download or read book The Information Provision in the Corporate Acquisition Process written by Tingting Liu and published by . This book was released on 2019 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a hand-collected dataset for takeovers from 1996 to 2013, I examine why some target firms obtain a second fairness opinion and the associated wealth effects of doing so. I find that multiple opinions are more likely to be used in deals in which management/investment bank conflicts of interest are high -- e.g., buyouts and stapled financing deals. In addition, the use of a second opinion has a significantly positive impact on target shareholders' wealth in these two types of deals. Fairness opinion valuation predominantly relies on accounting data and the benefit of seeking a second opinion increases with a firm's earnings quality. Collectively, the results suggest that a second opinion is used to facilitate transactions.
Download or read book Negotiated Acquisitions of Companies Subsidiaries and Divisions written by Lou R. Kling and published by Law Journal Press. This book was released on 2023-12-28 with total page 1528 pages. Available in PDF, EPUB and Kindle. Book excerpt: This law book includes advice on corporate business structuring deals, negotiating agreements, identifying issues and solving the real problems that are likely to arise during the acquisition.
Download or read book Fairness Opinions and Capital Markets written by Sebastian Lobe and published by . This book was released on 2008 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we provide the first empirical evidence of fairness opinions in Europe. Legal requirements concerning the use of fairness opinions in mergers and acquisitions are significantly different in Germany, Switzerland, and Austria. We examine the determinants of target fairness opinions in these various regulatory settings and, moreover, investigate the impact of such opinions on abnormal target returns. Whilst in Germany and Austria market participants do not deem fairness opinions important, they do create value for shareholders in Switzerland. Because conflicts of interest between target board and bidder are a main determinant of fairness opinions in Switzerland, we conclude that, when target management faces such conflict, external expert advice replaces the board's opinion on the offer.
