Valuation for Fairness Opinion
A fairness opinion is required in M&A Transactions to give an independent objective and financial analysis, as to the fairness of Share exchange ratio / Share entitlement ratio in case of a merger/ amalgamation or purchase consideration payable in case of an acquisition.
Fairness opinion is either mandated under regulatory provisions or is undertaken as a good corporate governance practice. Rigorous asset valuation is one of the key elements in producing fairness opinions.
At RNC, we are a leading valuation firm with years of experience in delivering detailed, diligent, and well-supported fairness opinions and valuation services that are unbiased, credible, conflict-free, and will hold up under third-party scrutiny.
While issuance of a fairness opinion, a professional financial valuation is required to ensure that public shareholders or minority shareholders of the transferor and transferee companies are not being prejudiced by the valuation so arrived and that the asset valuer has applied valuation methods on a relative basis. The objective is to eliminate any biases towards and favour to the promoters or their associated entities.
In case of Listed Companies, the Fairness Opinion is required on the valuation of assets/equity shares of the listed as well as the unlisted company by the valuers from an independent merchant banker under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
RNC can provide independent fairness opinions to the Board of Directors / Management of the companies in connection with their proposed transaction. The experience of our expert financial valuation team includes providing fairness opinions for mergers and acquisitions, amalgamations, demergers and scheme of arrangements (through our associated entity which is a SEBI registered Category I Merchant Banker).
Credentials
Network 18
Valuation of specified assets on behalf of the Board Members.
To speak to our Valuation Experts, Schedule an appointment.
FAQs
1. When is a fairness opinion required?
During mergers, acquisitions, related-party transactions, buybacks, delistings, and restructurings to ensure fairness to shareholders.
2. How is fairness assessed in a deal?
By analyzing DCF models, valuation multiples, and precedent transactions to check if terms are financially reasonable.
3. Who typically relies on fairness opinions?
Boards of directors, audit committees, regulators, and shareholders.
4. Are fairness opinions legally binding?
No, they are independent advice, not binding, but provide protection to boards and stakeholders.