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The document is provided to the board of directors. It is an unbiased 3rd party analysis of the deal at hand. This is to protect the interests of the company, management, shareholders etc. Fairness opinions are filled with SEC and stored in the Qatalyst partners.
Fairness opinions are regularly obtained by boards, special committees and other fiduciaries to gain a comprehensive understanding of the financial aspects of a transaction and to demonstrate they have made their decision with due care.
A fairness opinion is a report that evaluates the facts of a merger, acquisition, carve-out, spin-off, buyback, or another type of business purchase. It provides an opinion about whether or not the proposed stock price is fair to the selling or target company.
A fairness opinion is a letter summarizing an analysis prepared by an investment bank or independent third party, which indicates whether certain financial elements in a transaction, such as price, are fair to a specific constituent, from a financial point of view.
A fairness opinion is a letter summarizing an analysis prepared by an investment bank or independent third party, which indicates whether certain financial elements in a transaction, such as price, are fair to a specific constituent, from a financial point of view.
In preparing a fairness opinion, the investment advisors must look at the price, the terms of the sale, and the consideration to be received vis-a-vis the market rate for a similar transaction. When reviewing transactions, analysts try to look at the terms from the perspective of the company's investors.
A Fairness Opinion Example Say that Company X has made an offer to purchase Company Z. As part of doing due diligence, the leadership board of Company Z decides to work with an objective advisory firm independent of the deal to obtain a fairness opinion.
Fairness opinions address the fairness of the purchase price in an anticipated transaction. They are not generally required by the SEC or by statute or law, but have been considered best practice since the case of Smith v.