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Fairness Opinion


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Citation: 1989 Duke L.J. 27 1989 Content downloaded/printed from HeinOnline ( Mon Dec 3 16:27:50 2012 -- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and Conditions of the license agreement available at -- The search text of this PDF is generated from uncorrected OCR text. -- To obtain permission to use this article beyond the scope of your HeinOnline license, please use: &operation=go&searchType=0 &lastSearch=simple&all=on&titleOrStdNo=0012-7086



Fairness opinions have become a regular feature of every major corporate control transaction. Whether in negotiated mergers,1 freeze-out mergers, 2 hostile tender offers, 3 friendly tender offers,4 self-tenders, 5 leveraged buyouts, 6 negotiated share repurchases, 7 or negotiated sales of treasury stock,8 directors seek the blessing of investment banks before approving transactions or adopting defensive measures. These banks give their blessings in the form of fairness opinions, which usually consist of short letters that state an opinion about whether a proposed transaction is "fair" or "adequate." 9 In addition, the banks often give presentat Professor of Law, Harvard Law Schaool; Faculty Research Fellow, National Bureau of Economic Research. * Visiting John M. Olin Scholar, fall 1988, Harvard aw School; Associate, Kramer, Levin, Nessen, Kamin & Franke. For financial support, both authors are grateful to the Harvard Law School Program in Law and Economics, which is funded by the John M. Olin Foundation. Lucian Bebchuk's work was also supported by the National Science Foundation. The authors thank Irene Khaitman for her helpful research assistance and Andrew

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