In a stockholder appraisal action, the Grand Court of the Cayman Islands handed down a favorable judgment for Brattle client Fidelity National Financial after determining the fair value of dissenters’ shares was the same as the merger price. It was the first time the Grand Court placed exclusive reliance on the merger price, and no reliance on an income approach, when determining fair value.

Background

The Section 238 appraisal action stemmed from Fidelity National Financial’s June 2020 acquisition of FGL Holdings, a US financial services business selling annuities and life insurance policies. Over 99% of FGL’s unaffiliated shareholders approved the merger. At the time of the closing, those shareholders who did not dissent received cash and stock consideration valued at $11.06 per share. Dissenting shareholders, who owned 12 million shares at the time of the merger, demanded appraisal in accordance with Cayman Islands law, and FGL petitioned the court to determine the value of the shares formerly held by the dissenters.

Maples and Calder and Weil, Gotshal & Manges oversaw the appraisal action on behalf of FGL and retained Brattle in 2020. Brattle also worked alongside Richard Boulton KC of One Essex Court and Mac Imrie KC of Maples and Calder, who conducted the advocacy for FGL at trial. Led by Principal and M&A Litigation Practice Co-Leader Tim McAnally, the Brattle team provided consulting expert valuation services throughout the entire appraisal proceeding for the legal team.

Outcome

Justice Raj Parker of the Grand Court rejected the dissenters’ claim that FGL’s shares were worth $22.54 per share and instead determined that fair value was the $11.06 merger price that all other shareholders received in June 2020.