The Shareholder Forumtm

support of long term investor interests in

Appraisal Rights


Intrinsic Value Realization




The Delaware Supreme Court issued a ruling on December 14, 2017 that endorsed its interpretation of the "Efficient Market Hypothesis" as a foundation for relying upon market pricing to define a company’s “fair value” in appraisal proceedings. The Forum accordingly reported that it would resume support of marketplace processes instead of judicial appraisal for its participants' realization of intrinsic value in opportunistically priced but carefully negotiated buyouts. See:

December 21, 2017 Forum Report

 Reconsidering Appraisal Rights for Long Term Value Realization



Forum distribution:

Advocates of appraisal arbitrage ignore recent decisions to seek court valuation of strategic merger


For decisions of the Delaware Chancery Court addressing appraisals of companies in strategic combinations, see


Source: Law360, August 28, 2017 article

PrivateBancorp Investors Seek Appraisal Of $4.9B Merger

By Vince Sullivan

Law360, Wilmington (August 28, 2017, 6:47 PM EDT) -- Shareholders of PrivateBancorp Inc. petitioned the Delaware Chancery Court on Monday for an appraisal of their holdings in the company following a $4.9 billion cash and stock merger with the Canadian Imperial Bank of Commerce in June.

In their petition, three funds associated with Fir Tree Value Master Fund LP owning more than 2 million shares of the Illinois-based regional bank are asking the court to value their shares of PrivateBancorp and award them the difference in the appraised value and the consideration received in the merger.

CIBC acquired PrivateBancorp in a June 23 transaction that saw PrivateBancorp shareholders received $27.20 per share in cash, plus 0.4176 shares of CIBC in the $4.9 billion deal. The total consideration amounted to $60.43 per share going to PrivateBancorp investors.

The funds sent appraisal demand letters to the PrivateBancorp on April 27 seeking a valuation of their shares shortly after the bank filed a proxy statement detailing the deal with the U.S. Securities and Exchange Commission, but before a May 12 special stockholders’ meeting to vote on the deal.

Prior to the vote, CIBC had increased the cash portion of its offer twice, once to increase the total value of its deal and once in response to a decrease in its own stock price. The first increase was to $24.20 per share in March, and the second made the final deal price $27.20 per share in early May. The final combined deal price of $60.43 per share amounted to a 26 percent premium from CIBC’s original offer.

Before the increases, hedge fund Glazer Capital LLC and proxy advisory firm Institutional Shareholder Services recommended that PrivateBancorp investors vote against the deal because the $47 per share consideration significantly undervalued the bank. Glazer said at the time that a trend that saw regional bank values increasing was partly attributable to anticipated regulatory changes promised by the administration of President Donald Trump.

The Fir Tree funds say their appraisal rights are preserved under Delaware law and they have complied with the requirements of the law to seek appraisal through the court.

“Petitioners are entitled to an appraisal of the fair value of their shares of the company’s stock in accordance with the provisions of Section 262 of the [Delaware General Corporation Law] and have no adequate remedy at law,” Fir Tree’s petition said.

The funds are seeking the appraisal and payment of the fair value of their holding, as well as interest from the date of the merger, and the payment of its costs, attorneys’ fees and expenses.

Representatives for the Fir Tree funds, PrivateBancorp and CIBC could not immediately be reached late Monday for comment.

The Fir Tree funds are represented by Stuart M. Grant, Mary S. Thomas and Christine M. Mackintosh of Stuart & Eisenhofer PA.

Counsel information for PrivateBancorp and CIBC were not immediately available late Monday.

The case is Fir Tree Value Master Fund LP, et al., v. PrivateBancorp Inc., case number 2017-0617, in Delaware Chancery Court.

--Additional reporting by Fola Akinnibi and Chelsea Naso. Editing by Emily Kokoll.


© 2017, Portfolio Media, Inc.


The program supporting Appraisal Rights Investments was conducted by the Shareholder Forum for invited participants according to stated conditions, including standard Forum policies that each participant is expected to make independent use of information obtained through the Forum and that participant identities and views will not be reported without explicit permission..

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.