Decisions under increasing examination often involve a transaction that has significant financial implications for the company, including mergers/acquisitions, divestitures, take private/delisting transactions, capital raises or restructurings/reorganisations. These decisions can also involve related-party transactions, which may present a conflict of interest among the stakeholders of the company.

Now more than ever, it is important that directors visibly demonstrate a duty of care to their stakeholders when contemplating strategic transactions, and ensure transparency in order to avoid potential reputational damage or litigation (both in a corporate and, in certain instances, personal capacity). Fairness opinions are increasingly employed by Boards to assist in these cases.

Why Have an Opinion?

A fairness opinion is an opinion given by a financial advisor (usually an investment bank or corporate finance advisory house) stating that the financial terms of a corporate transaction are fair, based on objective financial analysis.

The fairness opinion helps the Board demonstrate:

• An objective evaluation of the transaction;
• That a thorough governance process has been undertaken;
• Protection of stakeholders' interests.

Given their multi-purpose applicability, fairness opinions have become a requirement or a best practice in many jurisdictions across Europe and worldwide. They are also increasingly used in complex multi-jurisdictional transactions, which require a thorough understanding of the legal and financial implications involved.

Get an Opinion that Counts

As an independent, advisory-focused investment bank, Houlihan Lokey carries out significant numbers of fairness opinions worldwide annually, and has experience with nearly every type and structure of transaction. Our independence and expertise in this field has resulted in us being ranked by Thomson Reuters as No. 1 Global M&A Fairness Opinion Advisor over the past 10 years.

For more information on fairness opinions or any of our other advisory services, please contact one of the undersigned.

SCHIFF NUTRITION INTERNATIONAL, INC.

We served as financial advisor to Schiff Nutrition International, Inc.—a market leader in the U.S. vitamins, minerals and supplements (VMS) category—on its sale to Reckitt Benckiser LLC (a subgroup of UK-based Reckitt Benckiser Group plc) for $42 per share or a transaction value of $1.45 billion (approximately €1.13 billion). In addition, we rendered a fairness opinion on behalf of Schiff’s Board of Directors. The purchase price represented an 81.1% premium to the company’s undisturbed stock price. The transaction allows Reckitt to solidify its position in the Consumer Health sector and expand into the large and rapidly growing VMS category.

ELSTER GROUP SE

We rendered a fairness opinion to the independent members of the Administrative Board of Elster Group SE in connection with the company's $2.3 billion acquisition by UK-based Melrose PLC via a tender offer completed in August 2012. Domiciled in Germany and listed on the NYSE prior to the transaction, Elster is a leading global provider of electricity, gas and water meters.

KRAFT FOODS

We rendered a fairness opinion to the Board of Directors of Kraft Foods Inc. in connection with the company's $19.6 billion acquisition of Cadbury PLC—the largest takeover of a UK company in 2010. The cross-border combination created a global leader in snacks, confectionery and quick meals with sales in 160 countries and annual revenues of approximately $50 billion.

JVC KENWOOD HOLDINGS, INC.

We rendered a fairness opinion to the Board of Directors of JVC KENWOOD Holdings, Inc. with respect to a restructuring of debt issued by its subsidiary, Victor Company of Japan, Ltd. In advising our client, we leveraged our expertise in rendering independent fairness opinions with our local presence and knowledge of the Japanese market.

AMERICAN MEDICAL ALERT CORP.

We served as the exclusive financial advisor to American Medical Alert Corp.—a leading, publicly traded provider of personal emergency response devices and services—on its sale to Tunstall Healthcare Group Ltd., a portfolio company of Charterhouse UK. We conducted a global competitive marketing process over an extended period of time resulting in a transaction at a premium of 59% to the prior three-month trading average.

SHALKIYA ZINC

We rendered a financial advisor opinion to the Management Board of Shalkiya Zinc as to whether their new private share placement with SAT & Co. was in the best interests of the company and its shareholders. Further, we served as UK Takeover Rule 3 financial advisor and rendered a fairness opinion to the new Board of Shalkiya Zinc, in connection with the mandatory offer made by SAT & Co. for the remaining public shares of the company. SAT & Co.'s investment allowed Shalkiya Zinc to reduce its outstanding liabilities and continue with expansion plans under control of a new, committed and capable industrial investor. Shalkiya Zinc is one of the largest Kazakhstan-based zinc-mining companies. SAT & Co. is a diversified industrial and mining conglomerate with a market capitalisation of about $560 million.