Reversing a four-year trend, the number of appraisal claims in M&A transactions is dropping, and experts say it may go even lower in the wake of a pair of decisions by the Delaware Supreme Court undermining the upside of shareholder appraisal litigation.
A third case, in which shareholders are challenging the valuation of Clearwire when the telecom was acquired by Sprint Nextel in 2013, is scheduled for arguments in March. Delaware’s appraisal law allows a company’s shareholders to petition the chancery court to assess the fair value of their shares. This has spawned a form of arbitrage as investors buy blocks of a company’s shares when it announces a merger with an eye toward filing an appraisal petition when the deal closes.
APPRAISAL PETITIONS
2016.....................77 (48 deals)
2017.....................62 (34 deals)
Published January 9, 2019.
