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| - | Overview |
| - | Stock Option Issuance |
| - | Fairness Opinions |
| - | Asset Allocation |
| - | Other Services |
| - | Representative Clients |
A fairness opinion is a written determination that a proposed transaction is fair to a particular class of shareholders, usually common shareholders. Fairness opinions are not required in most transactions, however corporate directors, especially independent directors, often want such an opinion before proceeding with a merger or acquisition. Historically, they looked to the investment bank advising on the transaction to provide an opinion, but now some are looking for an independent fairness opinion. Whether as part of a transaction or provided independently, Pagemill Partners offers this service.
At present, there is no basis against which to judge whether a transaction is substantively fair. This can lead to different interpretations of the proper standard to use. At a minimum, the consideration received by a shareholder must be no less than the value of what is tendered.
Beyond that, some believe that fairness must be considered relative to what other shareholders or parties receive (e.g. different treatment for control shareholders or generous consulting and non-compete payments for managers). Fairness also must consider other factors: comparing cash versus non-cash or contingent consideration, coordinating and evaluating competing offers, and judging the likelihood of completion of any offer. Finally, fairness must not utilize overly broad ranges or assumptions biased only in one direction - it must be meaningfully fair.
A good fairness opinion follows strong procedural guidelines and also scrutinizes the economic substance of the proposed transaction. The professionals at Pagemill Partners understand valuation techniques and the special requirements of fast growing technology companies. We utilize a variety of different valuation approaches, examining everything from historical trading in the company's stock to current acquisition premiums being paid to the discounted value of projected earnings.
In addition to providing the traditional letter which forms the core of a fairness opinion, Pagemill Partners completes an extensive written analysis and explains that to the board of directors, both before execution of the transaction documents and again just prior to the closing. We have performed fairness evaluations in connection with purchases, sales, and other transactions (e.g. divestitures or inside financings) and our opinions have been included in SEC filings.
Pagemill Partners would be pleased to provide a proposal for a fairness
opinion in connection with a transaction. We can complete our work rapidly,
if necessary, and our fees are reasonable, varying with the size and complexity
of the transaction.
