Petitioners in Delaware appraisal cases must necessarily argue that fair value exceeds the deal (market) price, whereas respondents often counter that fair value is in fact below the transaction amount. Each side typically relies on a valuation model to help make its case, but as these models are sensitive to their numerous inputs, they can result in a broad range of valuations – leaving it to the court to determine whether it is the market or the model that is wrong.
Below is a visual summary of appraisal litigation outcomes brought in Delaware Chancery Court between 2006 and 2018. The cases are divided into transactions where a public target’s management or large shareholder was ("Public Interested") or was not ("Public Disinterested") affiliated with the acquiror, as well as transactions involving private targets. The vertical line at the 100% mark indicates the original transaction price. The higher (petitioner) and lower (respondent) end points of each horizontal bar represent the proposed appraisal valuation for the transaction from each party. The yellow dot indicates the court-determined price.
Hovering over any portion of the bar will display the transaction details. You may also change the range of court-determined price and filter by transaction category.
For questions on this chart or any of the underlying data, please contact Michael Cliff.