After your business merges with another one, you may need to determine the value of your new business. Mergers affect the shareholders of both companies and the value of their shares, so it is important to accurately value the company. The acquiring firm may experience a temporary reduction in the value of their share after a merger while shareholders of the target firm often see an increase in the value of their shares. Ultimately, the stock price of the newly merged company is typically higher than both affected companies. However, the merger process may dilute the voting power of shareholders and affect the leadership in a company. All of these factors can ultimately affect the perceived value of the company and its value to the public.
Reasons for Post-Merger Appraisals
There are many reasons why you may need to determine the value of a recently merged business. Some common examples include:
- You need an accurate value for loans from banks and other financial institutions
- You want to evaluate the business for a proper price per share
- A shareholder believes a merger was completed below fair market value
- You want to check if shareholder fiduciaries are upholding their responsibilities
- You want to determine if the industry is being undervalued
If you need an accurate appraisal of the company, it is important to work with an experienced legal professional.
Litigation Regarding Appraisals
In some situations, differences in opinions on the value of the company may lead to litigation. Ultimately, these cases are often resolved by a judicial determination regarding the value of the business in which both sides to the case present extensive financial and technical evidence to be reviewed.
Contact a Knowledgeable Lawyer for Post-Merger Appraisal Issues
If you are a shareholder who wants to determine if management is properly valuing the company or otherwise need an accurate appraisal after a merger, it is important to work with legal professionals who can competently handle this process. Our business lawyers have extensive experience with the appraisal process and can provide you with sound legal advice and representation during this process. Contact us today to schedule a confidential consultation.
[widgets_on_pages]
