Fairness Opinions After InterOil

The Supreme Court of Yukon recently issued its reasons for approving Exxon Mobil's acquisition of InterOil [PDF], which closed on February 22, 2017.  The original $2.3 billion arrangement was blocked by the Yukon Court of Appeal on the basis that it was not fair and reasonable, in large part due to the lack of disclosure of the financial analysis underlying the original fairness opinion in support of the transaction, leading to a concern that the shareholder vote approving the arrangement was not fully informed.

Under the amended arrangement, Exxon continued to offer US$45 per share of Exxon common stock and increased the maximum amount of consideration payable under the contingent resource payment.  Responding to the criticism in the Court of Appeal decision, InterOil's revised proxy circular contained (i) a fixed fee long form fairness opinion that contained detailed financial analysis about the value of InterOil and the consideration payable under the