Series 79 practice questionmediumSqueeze-Out Mergers and Appraisal Rights
A minority shareholder who dissents from a squeeze-out merger in Delaware and properly perfects appraisal rights is entitled to receive:
- AThe price paid to majority shareholders in the merger
- BJudicially determined fair value, possibly excluding merger synergies✓ Correct answer
- COnly the book value of their shares
- DA fixed premium above market value
Explanation
Why B — Judicially determined fair value, possibly excluding merger synergies
In Delaware, dissenting shareholders who perfect appraisal rights are entitled to the fair value of their shares as determined by the court, which may exclude certain merger synergies. This prevents majority shareholders from underpaying for minority stakes.
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