An opinion given by a third independent party [investment bank, valuation firm, auditors] on the financial terms of a transaction [disposal, contribution, merger] which could create a conflict of interest between the parties to this transaction [as sale by a parent company of one of its assets to its listed subsidiary, which also has outside shareholders]. This opinion is most frequently based on detailed valuation work). – In order to avoid long lasting lawsuits, it has been common practice worldwide since about 1990 to present a fairness opinion when buying and selling companies (parts of companies) as well as in mergers and acquisitions. – In some cases, shareholder advocates have also had opinions prepared which contradicted a fairness opinion already published by another party. This then led to disputes regarding the valuation of individual items in the respective fairness opinion. – See share swap takeover, cannibalization, burn-out turnaround, cash sweep agreement, delisting, financial covenant, financial investor, capital management company, pay-in child bond, private equity financing, restructuring, risk capital, risk monitoring, structured, shark watcher, trade sale.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/