Fairness opinions are normally issued by a qualified financial advisor in situations where an independent, third party confirmation is needed to determine that a contemplated transaction meets the various standards of financial fairness. Typically the fairness opinion is issued to the company’s Board of Directors, or a specific committee or group affiliated with the company, and the opinion is generally requested prior to the completion of a financial transaction involving a material acquisition and/or sale of all or part of the company or its assets. It is vitally important for the Board to carefully direct the opinion to a specific principal’s needs (e.g. Board, minority shareholder, all shareholders). Fairness opinions are generally the final representations associated with a major corporate financial transaction.
There are numerous situations wherein a fairness opinion may appropriately be included in a major transaction event:
Documentation and records related to fairness opinions include:
The fairness opinion will assert that the points discussed above have been duly examined and reviewed and, presumably, will indicate that the transaction as contemplated or completed represents the best interests of all shareholders from a financial and business perspective.
For over 25 years, Sheldrick, McGehee & Kohler has provided fairness opinions for both public and private companies. The firm has represented corporations listed on the New York Stock Exchange, the American Stock Exchange, and NASDAQ, and have worked with major investment banking firms, venture capital/private equity firms and both national and local public accounting firms on behalf of their clients.