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Delaware’s First Appraisal Decision Post-Dell Reflects Potential Narrowing of Remedy

By K. Tyler O’Connell, Morris James LLP

Delaware’s appraisal statute permits dissenting stockholders of an acquired corporation to petition the Delaware Court of Chancery for the “fair value” of their shares. As previously reported, the Delaware Supreme Court’s recent decisions in DFC Global Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346 (Aug. 1, 2017) and Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd., __ A.3d __, 2017 WL 6375829 (Dec. 14, 2017) endorsed the view that, under the efficient capital markets hypothesis, deference normally should be afforded to the acquisition price for a public company resulting from a sale process free of material conflicts. The Dell decision accordingly reversed and remanded the Court of Chancery’s decision to award “fair value” significantly above the deal price based on a discounted cash flow analysis.

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