Elevating the Fairness Opinion above a Merger Ritual
Washburn University. School of Business
Kaw Valley Bank
Many publicly traded companies have chose a path to growth through merger and acquisition. As part of this strategy, investment bankers and lawyers are commonly hired to assist in the search for merger partners and help navigate the merger process. Still the merger process can be fraught with opportunities for mistakes and potential shareholder litigation. Since the mid-1980's boards of directors have relied upon third party fairness opinions in their quest to limit their litigation exposure in merger transactions. This paper examines how these fairness opinions have become less substantive and more ritualistic and proposes seven areas of suggested improvement.