The Company, in contrast, argued that, consistent with the approach endorsed by the Delaware Supreme Court in Dell and Aruba, which we have previously discussed here and here, the Court should rely on the implied value of the merger consideration on the signing date, adjusted to deduct an estimate of net synergies embedded in the deal price.

Petitioner argued for 90% weight on the DCF method and 10% weight on the adjusted trading price, which it argued would have implied a fair value on the closing date of $56.44 per share. Petitioner, a former HFF stockholder, asserted appraisal rights and presented several valuation methods to establish the Company’s fair value, including a traditional discounted cash flow analysis and an adjusted trading price analysis based on the Company’s unaffected trading price before the announcement of the merger, and adjusted based on a model reflecting changes attributable to the Company’s unexpectedly positive financial performance after the announcement. The transaction closed on July 1, 2019, and in the months between signing and closing, the per-share value of the deal consideration declined from $49.16 (based on the price of JLL’s stock at signing) to $45.87 (based on the price of JLL’s stock at closing), as a result of a greater than 13% drop in JLL’s stock price.

(“HFF” or the “Company”), announced on May 19, 2019. The case arose in connection with Jones Lang LaSalle Inc.’s (“JLL”) $1.8 billion cash-and-stock acquisition of HFF Inc. Below we break down the Court’s analysis in determining fair value, how changes in each merger party’s valuation drove the appraisal result, and key takeaways. The unique facts of this case, and particularly the sustained outperformance of the target in the interim period before closing, are worth keeping in mind in evaluating the risk that a successful appraisal proceeding can increase the amount of consideration payable in a public company acquisition. awarded the petitioner additional consideration based on an increase in the value of the target company that arose between signing and closing. In a noteworthy new post-sale appraisal ruling, the Delaware Court of Chancery in BCIM Strategic Value Master Fund, LP v.

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