As stewards of shareholder capital, board members often face decisions that can significantly impact shareholder value. Obtaining an independent fairness opinion is critical for the board of any business with a broad shareholder base. This includes both public and private companies of any size.
It is considered best practice to obtain a fairness opinion for any significant transaction that could affect shareholder value, especially if the deal will receive more scrutiny, such as in:
Material transactions
Related-party transactions
Transactions involving noncash consideration such as stock, seller financing, earnouts and options
Cross-border transactions
Transactions with a target in early development stage or different industry
Deals that involve significant synergies
Transactions that could impact a not-for-profit status
When is a Fairness Opinion delivered?
A fairness opinion is delivered prior to the board’s approval of the transaction and signing of the definitive agreement.
