If you own shares of a Delaware company that has been merged or consolidated, and believe that you have not been given fair value for your shares, then you may want to consider petitioning the Court of Chancery to appraise your shares.
How are shares appraised during a stock appraisal proceeding?
The discounted cash flow valuation methodology is the primary valuation method employed by the Delaware Court of Chancery in appraisal proceedings. Under this methodology, the equity value of the target company is projected from the target’s future cash flows and discounting them to their present value. This can require a complex analysis, and can involve a “battle of the experts.”
Recent decisions of Towerview LLC v. Cox Radio, C.A. 4809-VCP (Del. Ch. June 28, 2013) and in Merion Capital LP v. 3M Cogent, C.A. 6247-VCP (Del. Ch. July 8, 2013) have demonstrated that the Court generally utilizes the discounted cash flow method when appraising a company’s shares.