Who Decides ‘Fair Value?’ In Dell’s Case, a Judge - The New York Times

Sell it to the judge

"Yet Vice Chancellor Laster still decided that based on Dell’s “fair price,” the company, which is incorporated in Delaware, was sold for too little. “The concept of fair value under Delaware law is not equivalent to the economic concept of fair market value,” he wrote. “Rather, the concept of fair value for purposes of Delaware’s appraisal statute is a largely judge-made creation, freighted with policy considerations.”

The case is part of a growing trend in which hedge funds and other investors jump into a company’s stock after a takeover bid has been announced with the explicit plan of suing the companies to claim the price was too low. The practice — one that is likely to be catapulted even further by this decision — is known as appraisal arbitrage."

Who Decides ‘Fair Value?’ In Dell’s Case, a Judge - The New York Times