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Stock Market Value And Deal Value In Appraisal Proceedings, Robert T. Miller

Notre Dame Law Review

This Essay considers two methods of valuing public companies in the context of appraisal proceedings under section 262 of the Delaware General Corporation Law (DGCL). The first method relies on the efficient capital markets hypothesis (ECMH) and values the company based on the market price of its shares before any public disclosure of the possibility of a transaction (the unaffected market price). The second relies on the price that an unrelated party agrees to pay to acquire the company in a transaction negotiated at arm’s length after a robust sales process by the selling board (the deal price). Both the …