Objective, independent advice
The fiduciary duty of a company’s board of directors exposes board members to significant liability if a transaction is not in the best interests of its shareholders. Fairness Opinions from a Chartered Business Valuator (CBV) can provide assurance that board decision-making is fair and reasonable, both in fact and appearance.
Due to the subjective nature of fair value measures and their impact on financial statements, in addition to the need to comply with existing and proposed legislation in Canada and the US, companies must ensure that fairness opinions are prepared by a credible, objective, and independent advisor. Independent valuation advice can increase the legitimacy of board decisions, fulfill the fiduciary duties of the board, and meet the needs of shareholders, regulators, bondholders, counterparties to the deal, or the courts, as applicable.
BDO has helped companies determine the fairness of a number of transactions, including proposed transactions, mergers or acquisition, divestitures, unsolicited offers for a public company’s shares, and hostile takeovers. Our deeply experienced CBVs are appropriately designated to provide independent fairness opinions and are based on objective and independent analyses. They include not only valuation analysis, but a comprehensive review of the transaction’s financial structure and an analysis of the type and timing of the consideration being offered.
We provide independent fairness opinions to boards in connection with various events and transactions, including:
- Board members requesting independent fairness opinions
- Financing transactions that may dilute current investors
- Related-party transactions/special committee formation
- Opinions required by a bond indenture or other financing document
- Sale or merger transactions without a formal sale process
- Transactions without an investment banker or advisor