Dissent Rights In M&A Transactions: Much Ado About Nothing?

In its recent decision in Carlock v ExxonMobil Canada Holdings ULC¹, the Yukon Court of Appeal found that transaction price, on the basis of objective market evidence, was the best determination of fair value for dissenting shareholders in the takeover of public companies, including court-approved plans of arrangement.

Key Takeaways

• This decision confirms that courts will give significant weight to objective market evidence when determining fair value for dissenters' shares in the context of public mergers and acquisitions and will generally prefer market valuation over theoretical approaches where the market is demonstrably efficient.
• Transaction price will be considered objective market evidence where the price was negotiated in a competitive market consisting of well-informed and sophisticated parties, and where there is no evidence that a different process would have led to a better result for shareholders.