December 16, 2016
In its December 16, 2016 post-trial decision in the LPS appraisal case, Merion Capital L.P. v. Lender Processing Services, Inc., C.A. No. 9320-VCL, the Delaware Court of Chancery adopted the $37.14 per share merger price as the fair value for the company, rejecting plaintiff’s claim for $50.46 per share. The court held that the deal price constituted reliable evidence of fair value because the company conducted an even-handed sale process involving multiple strategic and financial buyers, who were provided adequate and reliable information about the company. Weighing the valuation methodologies presented by the parties, the court ultimately gave 100% weight to the $37.14 deal price.
LPS highlights the importance of a thoughtful and carefully executed trial strategy. The court emphasized that determining whether to adopt the deal price is a fact-intensive inquiry and observed: “Because an appraisal decision results from litigation in which adversarial parties advance arguments and present evidence, the issues that the court considers and the outcome that it reaches depend in large part on the arguments that the advocates make and the evidence they present. An argument may carry the day in a particular case if counsel advance it skillfully and present persuasive evidence to support it. The same argument may not prevail in another case if the proponents fail to generate a similarly persuasive level of probative evidence or if the opponents respond effectively.”