Dell Appraisal: Delaware Supreme Court Rejects Chancery Court Valuation Giving No Weight to Deal Price in Connection with Management-Led LBO
Robert S. Reder & Micah N. Bradley | 72 Vand. L. Rev. En Banc 201 | Dell MBO | Reverses Chancery Court valuation that relied exclusively on a discounted cash flow analysis while giving no weight to deal price or stock market trading values |
| Delaware General Corporation Law §262 (“DGCL §262”) allows target-company stockholders to challenge the price payable for their shares in a corporate merger by dissenting from the merger and seeking an alternative—and hopefully higher—valuation from the DelawareCourt of Chancery (the “Chancery Court”). As has been well-chronicled, the number of DGCL §262 challenges has spiked over the last decade, concurrent with the rise of hedge funds devoted to “appraisal arbitrage.”