How Institutional Investors Are Letting Billions Slip Through Their Fingers in Delaware Appraisal Actions
An FRT Whitepaper
Investors are leaving billions of dollars on the table in Delaware appraisal actions. With over 160 mergers and consolidations eligible for appraisal each year, it is critical to implement a process to identify opportunities where your firm may be underpaid for its shares.
In May, the Delaware Chancery Court issued its opinion in the Dell appraisal case, valuing the company’s common stock at 28% more than the $13.75 paid to shareholders on October 29, 2013. In other words, investors were underpaid by about $6 billion in the deal. Despite the magnitude of Dell’s underpayment, Dell is only paying $37 million to a handful of investors. Why? Most investors having failed to timely exercise their appraisal rights before the vote on the deal, are now ineligible for payments and have consequently left $5.96 billion on the table.
- An overview of Delaware appraisal law and recent trends
- How appraisal awards can typically exceed tenders
- How firms utilize appraisal rights without filing suit or prosecuting appraisal petitions themselves
- Best practices on identifying, monitoring, and evaluating appraisal situations as to not miss out on future premiums
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