Gail Weinstein is senior counsel and Philip Richter is a partner at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank publication by Ms. Weinstein, Mr. Richter, Brian T. Mangino, Robert C. Schwenkel, Andrea Gede-Lange, and David L. Shaw. This post is part of the Delaware law series; links to other posts in the series are available here.
As we discussed in our post last week, the Delaware Court of Chancery, in its SWS decision issued May 30, 2017, relying on a discounted cash flow analysis, determined that the appraised “fair value” of SWS Group, Inc. (the “Company”) was 7.8% below the merger price paid by the acquiror, Hilltop Holdings, Inc. In our study of appraisal decisions since 2010, there have been only two other cases in which the court found fair value to be below the merger price—both of which involved unusual facts and, in one, the fair value determination was only nominally below the merger price.
