Corporate Finance - Fairness Opinion (Mergers and Acquisitions)

When one company tries to take over another company, the target company's board of directors might hire an outside company to issue a fairness opinion. A fairness opinion is a letter (typically issued by an investment bank or a company that specializes in valuation) that says the merge price is fair. The target's board of directors would get a fairness opinion to protect themselves from a lawsuit: if the target's shareholders don't like the terms of the deal, they could sue the board members for not doing more to get a better price or more bids. By hiring an expert to issue a fairness opinion, the board members are protected. If you'd like to see the fairness opinion that Morgan Stanley issued when Merck merged with Schering-Plough, click on the link below and go to "Annex D" in that document: https://www.sec.gov/Archives/edgar/data/310158/000095012309009217/y77207sv4.htm Companies sometimes hire a firm to issue a fairness opinion when companies make divestitures.— Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world. — SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS: • A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING • A 44-PAGE GUIDE TO U.S. TAXATION • A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS • MANY MORE FREE PDF GUIDES AND SPREADSHEETS * http://eepurl.com/dIaa5z — SUPPORT EDSPIRA ON PATREON *https://www.patreon.com/prof_mclaughlin — GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT * https://edspira.thinkific.com — LISTEN TO THE SCHEME PODCAST * Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725 * Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc * Website: https://www.edspira.com/podcast-2/ — GET TAX TIPS ON TIKTOK * https://www.tiktok.com/@prof_mclaughlin — ACCESS INDEX OF VIDEOS * https://www.edspira.com/index — CONNECT WITH EDSPIRA * Facebook: https://www.facebook.com/Edspira * Instagram: https://www.instagram.com/edspiradotcom * LinkedIn: https://www.linkedin.com/company/edspira — CONNECT WITH MICHAEL * Twitter: https://www.twitter.com/Prof_McLaughlin * LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin — ABOUT EDSPIRA AND ITS CREATOR * https://www.edspira.com/about/ * https://michaelmclaughlin.com