Fair fight

1 March 2018 By Reynolds Holding Follow @holdingren

Delaware courts are cracking down on settlements and appraisal claims for higher payouts in mergers like HP’s $2.7 bln Aruba union. Many are rattled, but it’s too soon to panic. The rulings could cut abuse and uncertainty in the legal process, leading to more and better deals.

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The Delaware Supreme Court on Feb. 23 affirmed a lower-court decision granting holdout shareholders less than the merger price in their appraisal case challenging as too low the payouts in Hilltop Holdings’ $350 million acquisition of Texas bank SWS in 2015. Also on Feb. 23, Delaware Vice Chancellor Samuel Glasscock ruled that dissenters to Verizon’s $4.4 billion purchase of AOL in 2015 would receive substantially less than the merger price in their appraisal action.

On Feb. 15, Delaware Vice Chancellor Travis Laster refused to grant shareholders who had filed an appraisal case more than the $24.67 per share that Hewlett-Packard paid in 2015 for Aruba Networks. Instead, he awarded them $17.13 a share, the undisturbed market price before the transaction was announced.

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