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Raising the bar for fairness opinions
A fairness opinion is an important step toward greater transparency and protection of stakeholder interests.
Boards of directors are obligated to perform diligence surrounding proposed transactions to meet their fiduciary responsibilities. By seeking a fairness opinion, board members receive supporting documentation from an independent third party that provides analytical support to determine that a proposed transaction is fair from a financial point of view. Although courts still do not require obtaining a third-party opinion, such assurances are becoming best practices in order for board members to demonstrate their fiduciary duties when considering a transaction.
A fairness opinion is objective
A fairness opinion from Grant Thornton Financial Advisors LLC is independent. Rather than providing a valuation or a recommendation of a specific price to transact, the fairness opinion states whether the transaction price is within an observable range of potential transactions. Our advisors provide an opinion to state whether a transaction price is fair to boards of directors and indicates that the consideration meets a threshold.
Who needs a fairness opinion?
Traditionally, boards or independent committees on both sides of a merger where shareholder approval is required will obtain a fairness opinion. An acquirer might also seek a fairness opinion if the transaction is deemed financially onerous or dilutive to the acquirer’s shareholders. On the other hand, boards of sellers will almost always seek a fairness opinion to fulfill their fiduciary duty. A fiduciary should seek a fairness opinion in their review of:
- Tender offers, particularly those involving the buyout of minority shareholders
- Private placements
- Management buyouts
- Corporate restructuring, including going private
- Related party transactions
- Other transactions with a shareholder vote
Why seek a fairness opinion?
- Obtain an independent opinion
- Reduce risks and conflicts of interest
- Avoid controversies
- Fulfill fiduciary responsibilities
- Obtain greater confidence with complex deal structures
- Alleviate shareholder and stakeholder concerns
Why choose Grant Thornton Financial Advisors LLC?
We provide fairness opinions based on objective, independent analysis. Our professionals are highly skilled and credentialed and have extensive training in valuation, accounting and auditing, taxation, finance, economics, and investment banking. They are further equipped with technical training in finance, M&As, statistics and economics with extensive experience providing high-quality work involving confidential information with time-sensitive challenges.
Grant Thornton Financial Advisors LLC is an Investment Advisor and a wholly owned subsidiary of Grant Thornton LLP. Grant Thornton LLP does not provide investment advisory services.