Marco Maugeri

The Role of Contract and Market Price in Appraisal Valuations of Publicly Traded Shares

  • Abstract

Informations and abstract

Keywords: Appraisal Rights; «Fair Value» of the Shares; «Market out» Exemption.

This paper provides an initial framework of the changes brought by the Italian Law Decree no. 91/2014 to the discipline of the determination of the share value in case of withdrawal from a listed company. Following a brief survey on the historical evolution of the discipline, the paper proposes to use, as logical coordinates of the analysis, the category of the «market» and the category of the «contract» and claims a clear functional separation between the same. While, indeed, the use of market criteria (ie: the arithmetical average of the closing prices of the last six months) performs the task of protecting, "subsequently", the interest of the "individual «dissenting» shareholder" to achieve the exchange value of the share at conditions not affected by the transaction, the statutory reference to evaluation criteria such as the net-worth method and the income method rather tends to protect, "in advance", the interest of "all shareholders" to the maximization of the value of the corporate assets. Indeed, the inclusion in the statute of a clause which imposes to liquidate to the withdrawing shareholders the «fair value» of the shares reduces "ex ante" the risk that the directors could plan wealth destructive transactions or anyway submit to the shareholders' meeting deliberations whose cost in terms of appraisal is greater than the benefit in terms of the increase in value of the company. Final remarks are dedicated to the analysis of certain practical issues concerning, essentially, the extent to recognize to the statutory option and the implications of its possible exercise on the appraisal proceedings.

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