Hi chelseasquare-ga,
The question is a bit complex. You cross over into two disciplines.
Fairness opinions are usually obtained from accounting firms. They are
an analysis of the fairness of the offer being tendered. Basically
they verify that the price is reasonable and that all parties are
being treated equitably.
There are plenty of firms that will advise you and help to prepare
these agreements. However, they don't seem eager to share templates
and sample forms on their sites.
This business valuation firm located in New York State provides
background and a sample form.
http://www.jlpierson.com/Opin.htm
Canon Public Tender Offer contains a fairness opinion in section F.
http://www.canon.ch/pix/d/dyn/Prospectus-e.pdf
Freeadvice.com provides a search page
http://www.uslegalforms.com/enter.cgi?freeadvice%5E/adviceco/index.html
enter the words Fairness Opinion and it will bring up two matches.
Proposal to Consider and Approve an Offer by the Company to Exchange
its
Outstanding Shares of Series 1 Preferred Stock for Common Stock AND
Letter to Board of Directors
select preview and you can access the forms in PDF format.
Shareholder agreements often contain fairness opinions. These are
agreements made between the board of directors or other governing body
and the shareholders. The shareholder agreement is basically an
anti-takeover device and is commonly known as a “poison pill.” There's
quite a bit of debate on these agreements, especially in regard to
Delaware corporation and the agreements are a bit easier to find than
fairness opinions.
The Freeadvice.com page will turn up 8 hits to the query: Public
Corporations - Anti-takeover
These are different forms of share value rights protection agreements.
Findlaw corporate counsel section has many contracts available for on
line viewing
http://contracts.corporate.findlaw.com/agreements/dynegy/shareholderagrmnt.html
will bring you to one shareholder agreement, but a search for the
terms you need will supply many samples.
This law book exchange site has a text that provides background on
these options. The book is very reasonably priced for a law reference.
http://www.lawbookexchange.com/feb02sl/Feb02sl-4.html
“149. Folk on the Delaware General Corporation Law: A Commentary and
Analysis. Fourth edition. Edward P. Welch and Andrew J. Turezyn. New
York: Aspen Law & Business. 3 vols. Looseleaf. Current through 2001-1
supplement. Publisher’s Price $595. Special $195.
* …many [cases] unreported and unavailable in any other source.
Provides coverage of … the “poison pill” defense and other takeover
tactics, contested takeovers, leveraged buyouts, and proxy contests,
appraisal rights, alternative business entities.”
This CD and ring binder contains many sample “poison pill” agreements.
It sells for $125.00
Special Study for Corporate Counsel on POISON PILLS
http://www.businesslaws.com/toc206.htm
Although no sample form is included at this site it does give solid
legal opinion.
http://www.inc.com/articles/legal/biz_finance/legal_merger/22138.html
A scholarly article on the poison pill defense does not have sample
forms, but give a lot of well researched information.
The Market for Corporate Control in Canada
cibs.tamu.edu/cswht/mahajan.pdf
search terms: independent financial advisor fairness opinion sample
This is an interesting area of research. Thanks and good luck.
bcguide-ga |
Request for Answer Clarification by
chelseasquare-ga
on
29 Oct 2002 00:03 PST
Thanks, but what i was interested in was actual fairness opinions
issued by financial advisors about a shareholder rights plan to be
adopted by shareholders. I understand that a large number of public
companies adopted such anti-takeover measures and I further believe
that a number of those companies filed with the SEC actual opinions by
outside counsel and/or financial advisors (such as investment banking
firms). I would like to see copies of such opinions expressing a view
on the fairness of such shareholders rights plans.
|
Request for Answer Clarification by
chelseasquare-ga
on
29 Oct 2002 14:12 PST
Please refer to my previous request for clarification. I am aware that
fairness opinions are usually issued by investment banks to public
companies to express a view on the fairness of a specific (often
merger or acquisition related) transaction.
A shareholder rights plan is often introduced and proposed by
management who want to assure that all shareholders are treated
equally and fair in a takeover by a third party "raider" (management
interpretation) and/or to entrench existing management (opposing
shareholder interpretation).
What I wanted was a fairness opinion issued by an investment bank, law
firm or accounting firm specifically rendering an opinion on the
fairness of the proposed shareholder rights plan.
The answer you have given me does not address this issue, but perhaps
no such fairness opinions are issued or required ?
|
Clarification of Answer by
bcguide-ga
on
29 Oct 2002 21:19 PST
Hi,
The first link shows a sample fairness opinion and the second has an
actual fairness opinion from Price Waterhouse Coopers for Canon.
I've been searching for more actual filings pertaining to US filings
online. It seems that the exhibits, which the fairness opinions fall
under, are not filed on the Search the EDGAR Database which lists all
SEC electronic filings. Yahoo finance has a powerful lookup tool as
well, but doesn't maintain online copies of fairness opinions.
I did find http://www.houlihan.com/services/fairness/fairness.htm
where severalcompanies that had fairness opinions prepared by this
firm are listed (See the tombstones at the bottomof the page.) Having
located the names of some relevant companies, I'll either be able to
find the documents online or call the company and ask how to optain a
copy of the document. I haven't abandoned your question, it's just
taking more digging to get additional full transcripts of these
documents.
Do take a look at the first two links in the answer and I will get
back to you tomorrow with some information on the additional forms.
How many more do you need?
bcguide-ga
|
Clarification of Answer by
bcguide-ga
on
29 Oct 2002 21:37 PST
Hi,
One of the links in the answer to the fairness opinion is not working
- http://www.uslegalforms.com/enter.cgi?freeadvice%5E/adviceco/index.html
is a bad link...
go to http://www.uslegalforms.com/
enter fairness opinion as the search term don't change anything in
states or titles
Hit search and you get two results
If you click on"Description: Information and Preview"
"Proposal to Consider and Approve an Offer by the Company to Exchange
its
Outstanding Shares of Series 1 Preferred Stock for Common Stock"
comes up
Click on "Previews: Preview in pdf format" - page 6 is a sample
Fainess opinion for an actual company.
The second example is also a fairness opinion letter.
I cut and pasted the link and didn't notice the garbage that had crept
in. This one will definitely lead you to the forms.
Still looking for more, though...
I'm on a quest :-) Someone needs to have an actual filing - complete
with all exhibits - online!
bcguide-ga
|
Request for Answer Clarification by
chelseasquare-ga
on
29 Oct 2002 23:31 PST
Thanks These are actual samples of fairness opinions about the
fairness of acquisition related transactions - as set out in my
previous clarifications - actually very interesting, but not
specifically what i was looking for. I thought companies would file
these fairness opinions as an appendix to their filings in proxy
statements requesting shareholder approval. From your research this
does not seem to be the case. Moreover, you could not find reference
to actual fairness opinions that relate to the fairness of a
shareholder rights plan rather than a proposed acquisition or
disposal. But i very much appreciate your research, it appears that
what i am looking for is just not available on the net.
|
Clarification of Answer by
bcguide-ga
on
30 Oct 2002 01:12 PST
The proxy statements don't have fairness opinions included - even as
exhibits. I'm pretty familiar with those and after having checked many
more on the SEC search... I tend to agree. But let me do some more
checking. If not on the net, if they exist - there are other options.
I'll check when things open up on the East Coast.
You're specifically looking for fairness opinions that relate to the
"fairness" of the shareholder agreements and not to the fairness of
the offer being made by the corporation... it may be that there is
such a document but it is known by some other name. I'll check my
sources tomorrow and get back to you.
bcguide-ga
|
Request for Answer Clarification by
chelseasquare-ga
on
30 Oct 2002 02:22 PST
Thank again, we are much nearer, but my quest is for actual fairness
opinions expressing a view on the fairness of a shareholder rights
plan (poison pill) which give the directors of a corporation a number
of rights to defend an unwelcome takeover bid. Such proposals to the
shareholders could include staggered voting for the board, issuing
additional shares, requiring supermajority etc. Of specific interest
to shareholders is on the plus side that hopefully all shareholders
are treated equally and on the minus side a deterrent for takeover
bids which could have resulted in a higher total return to
shareholders. The fairness opinion would most likely include an
analysis of the effect on the share price and on takeover activity on
companies that have adopted such a plan in the past.
|
Clarification of Answer by
bcguide-ga
on
30 Oct 2002 15:22 PST
Hi,
I talked to a few people who do this professionally.
The summary of what they said is:
The shareholder agreement is the document that spells out the
protection for the board/owners and the shareholders. All of the
issues - staggered voting for the board, issuing additional shares,
requiring supermajority or constraining to whomshares may be sold,
equal,non-beneficial treatment or beneficial treatment of shareholders
- are stipulated in the shareholder agreement.
The fairness opinion normally analyzes the agreement to verify that
the financial statements are fair in regard to the market and the
industry. They do not go into whether the antitakeover provisions may
have an effect on the price of the stock. Several stated that the
latest thinking is that in many cases an antitakeover stipulation
actually increased the stock price. The many factors that combine to
determine whether the stock price would have changed make this kind of
prediction dangerous.
So, a fairness opinion which gives an opinion on the fairness of the
agreement in terms of giving more power to the board is not something
that is normally done. By stating that the agreement seems fair to the
shareholders, this information is implied.
It seems that what you are looking for, an opinion as to the fairness
of the agreement itself - and not the financial aspects of it - isn't
normally done. The assumption being that if the agreement gives a fair
deal to the parties involved in terms of their investments, the power
structure and control issues are irrelevant, internal matters.
Hope this helps to clarify the situation.
bcguide-ga
|
