...FAIRNESS OPINIONS IN MERGERS AND ACQUISITIONS Anil K. Makhija* The Ohio State University Rajesh P. Narayanan Ohio University April 11, 2007 ____________________________________________________________ __________________ Abstract Fairness opinions provided by investment banks advising on mergers and acquisitions have been criticized for being conflicted in aiding bankers further their goal of completing the deal as opposed to aiding boards (and shareholders) by providing an honest appraisal of deal value. We find empirical support for this criticism. We find that shareholders on both sides of the deal, aware of the conflict of interest facing advisors, rationally discount deals where advisors provide fairness opinions. The reputation of the advisor serves to mitigate this discount, while the contingent nature of advisory fees appears to have no impact. We also find support for allegations that fairness opinions are sought by boards for the legal cover they provide against shareholders unhappy with the deal’s terms. JEL Classification: G34, G24 Keywords: Fairness Opinions, Mergers and Acquisitions, Investment Banking ____________________________________________________________ __________________ *Corresponding author: Anil K. Makhija, 700 E. Fisher Hall, Fisher College of Business, The Ohio State University, Columbus, OH 43210. Tel: (614) 292-1899. E-Mail: Makhija.1@osu.edu. We are grateful for comments from Angie Low, Brian Nocco, Robert Rosholt, and René Stulz,...
Words: 14214 - Pages: 57
...Assignment 2 Fairness DEAKIN UNIVERSITY ECL 776 - Language Testing and Assessment Unit Chair: Dr. Rod Neilson Adam Scott 500148222 Introduction Testing is a fundamental aspect of human nature and society. Humans have used tests for psychological and physical inclusion since history began. The importance is evident in early literature such as Homeric text where allusions to testing are personified as gods challenging man. Undoubtedly, tests in those times had their own high-stakes nature, perhaps being the life of an individual, and while this may seem extreme and unfair in the twenty-first century, in its context was perhaps necessary to ensure the survival of a group. This protectionism no doubt persists today, evident in social policy and language norms. Although the stakes have changed, entry to a society is no less high contextually in terms of financial and emotional currency. Now as the dominant species the survival of the fittest no longer seems relevant, so attention must be drawn to current gate-keeping practices and not only their necessity but also whether or not they are fair. While language testing has become standard practice in many countries it has also become politicized especially as a means of power (Hamp-Lyons, 1997a; Shohamy, 2001). In this case the term fairness becomes problematic because determining whether it is society or the political class who has set the standards has many implications. Language testing systems employed by governments...
Words: 2563 - Pages: 11
...1. Using examples, explain the difference between obscene and indecent materials. Obscene and indecent both have different meanings but are similar in many ways. Obscene material is described as disgusting or repulsive but indecent material is described as being offensive to the public. Both obscene and indecent can be view differently by the public; however, the Constitution plays a role with indecent material. Obscene material "is not protected by the First Amendment,” (The Dynamics of Mass Communication Tenth Edition, page 377) and broadcast stations cannot air obscene material at anytime. The problem with this is that no one had come up with a set standard of what obscene material is. Due to the difference in beliefs between families and individuals, no two people have the same beliefs and will not agree to a set standard of what obscene material really is. Since obscene material is can not be banned completely and therefore can be view during nighttime broadcasting. A good example of this is the adult swim channel. During the day children can view cartoons like Spongebob and Rugrats; but when 10 o’clock p.m. hit, the channel switches to adult swim when there are show with naked women and sex scenes. According to the U.S. Supreme Court, to be obscene, material must meet a three-prong test, "(1) an average person, applying contemporary community standards, must find that the material, as a whole, appeals to the prurient interest (i.e., material having a tendency to excite...
Words: 1267 - Pages: 6
...business experience to understand what is acceptable or ethical. Deciding if an activity is considered ethical depends on the culture the business operates (Ferrell). Fairness and honesty are amongst the biggest issues in business related ethics. It can become a very difficult problem that can and will affect the business. We know that ethics concerns moral issues, so making a decision that will have negative impact on the company is going to be tough for the person. An individual can make either a right or wrong decision, depending on how it will affect their life and workplace. In turn, the business will react accordingly to its moral guidelines and principles provided that the executives do not lose sight of the essential value of fairness. Everyone will have their own concept of right and wrong, so coming up with one definition of business ethics can be difficult. Moral standards are created by home environment, religious beliefs and traditions therefore making ethics hard to define, but not impossible to create (Agbata). At minimum, employees are expected to follow all applicable laws and regulations. Beyond the scope of obeying the law, they are expected not to harm customers, employees, clients, or competitors knowingly through deception, misrepresentation, coercion, or discrimination. Honesty and fairness can relate to how the employees use the resources...
Words: 1308 - Pages: 6
...Organizational fairness plays an important role in any and all organization. I have worked in my unit for almost four years as a law enforcement officer and have noticed quite a few changes and some recurring problems in our unit. Few of our problems that we often face in my career field are not enough opportunity in my career field to work on different job positions and the reason being is because we have a lot of high ranking individuals in my unit that are well over qualified that kept the same jobs in our unit, which prevent the lower ranking echelons to apply for different job titles. I have taking the time off to do a lot of volunteer work on my off time and as well as taking classes online because this is required of me to exceed on what is being expected of me when I had my feedback from my supervisor. The schedule that we work is great, but the fact the matter is, we will be working four days 12 hour shift and two days off. It will not be a normal schedule like we used to, because we would have weekends off every other cycle, because of this, we have minimum manning. However, I feel as though the old buddy system is being carried on by the higher ranking individuals and even if I tried to put in for an award for the cop of the month, or a quarterly award, it is more than likely that someone else is getting it. But what makes it worse is that the individuals who end up getting an award are the same people that received disciplinary actions through paperwork for...
Words: 561 - Pages: 3
...make-up was then deemed the domain of film stars. Cosmetics were only openly put up for sale in the early part of the twentieth century for the first time. Tanned or darker skin tones became popular only as late as the early twentieth century. It was in this era that tanning the skin became a popular fad. There is a huge competition among the companies working with the fairness cream segment of FMCG industry. HUL is leading the market in many segments from last couple of decade. But right now it is facing a good competition from the other existing companies like P&G, Marico, Godrej, Dabur etc. A full data of these companies and there market share is given in the following above table. Market Share of Companies Company % HUL 46.2 P&G 6.3 Dabur 5 ITC 6 GCPL 2.1 Emami 14.3 Cavin Care 11.5 Marico 8.6 Prices of Various Fairness Creams Product Qty Price Fair and Lovely Multi Vitamin 50 82 Nivea 50 290 Garnier Light 40 125 Olay Natural White 50 310 Pond's White Beauty 50 219 L'oreal 18 299 Lakme Perfect Radiance 50 170 Clean & Clear 50 170 Neutrogena 50 235 Himalaya Fairness 50 65 Dabur Uveda 30 115 Fairever 50 78 Fairone 50 300 Emami 50 90 Raaga 25 79 VLCC 50 240 Kaya 50 891 Fair &...
Words: 2564 - Pages: 11
...this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and Conditions of the license agreement available at http://heinonline.org/HOL/License -- 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: https://www.copyright.com/ccc/basicSearch.do? &operation=go&searchType=0 &lastSearch=simple&all=on&titleOrStdNo=0012-7086 FAIRNESS OPINIONS: HOW FAIR ARE THEY AND WHAT CAN BE DONE ABOUT IT? LucIAN ARYE BEBCHUKt AND MARCEL KAHAN* INTRODUCTION 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...
Words: 14271 - Pages: 58
...Fairness doctrine changes talk radio and cable news? Fairness Doctrine was started in 1949 by FCC right after World War II. Because lawmaker realized, the very powerful tool, TV, could be controlled by very few people, so congress wanted to prevent. The year 1949 was the age of a couple of commercial TV networks generally relying on the telephone company for live program distribution to affiliates across the network. There were no satellites or videotape, and no other programming sources were available other than locally originated live or film content. (SosemanNed, 2013) It required Broadcaster license holders to give time to issues public importance and provide political balance. It was challenged 1969, it was uphill by the Supreme Court. But, in 1987: President Ronald Reagan simply abolished it. It freed talk radio to provide ONLY the programing listeners were willing to support. Soon afterward, the very next year, Rush Limbaugh who are in Right Wing amount of charge, launched his own radio talk show. It had tremendous success. Rush Limbaugh is a conservative American radio talk show host and political commentator. In his book and show, what he regards as Liberal policies as well as what he perceives Liberal bias in major U.S. media. He had an issue because he said “hope Obama fails” Around 20 million or 15 million listeners, and those are large numbers, so why Limbaugh is taken seriously and is believed to be influential. Now, democrats in control, they Consider Reviving...
Words: 960 - Pages: 4
...Question 2 (essay question) “Fairness is a value that is touted and typically reinforced from childhood onwards. Its association is universally positive. But does fairness have a place in business?” Rubin, J.D. (2012) Fairness in Business: Does it matter and what does it mean? Business Horizons 55 p11 REQUIRED: A. Read the journal articles noted on the reading list (available on Moodle). B. With reference to appropriate literature, write an essay that addresses the following points: i. Identify the problems businesses face if they only focus on profits and share prices; ii. Explain the importance of fairness in business AND explain what it means for a business to be fair. Fairness is a value that is touted and typically reinforced from childhood onwards. Its association is universally positive. But does fairness have a place in business? Points to talk about: Profit is the key incentive which drives businesses to do better, to keep the business going, and the money can be used to invest further for the business to grow and make better things for the world. However, what happens when the business only focus on profits and share prices but nothing else? What happens if the head of the business is only in it for them-selves, but not for the whole welfare of the business and what the business is for? ->all companies require capital to carry out business activities and sustain themselves. i) Problems businesses face if they only focus...
Words: 753 - Pages: 4
...Does Fairness Prevent Market Clearing? An Experimental Investigation Ernst Fehr; Georg Kirchsteiger; Arno Riedl The Quarterly Journal of Economics, Vol. 108, No. 2. (May, 1993), pp. 437-459. Stable URL: http://links.jstor.org/sici?sici=0033-5533%28199305%29108%3A2%3C437%3ADFPMCA%3E2.0.CO%3B2-E The Quarterly Journal of Economics is currently published by The MIT Press. Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/journals/mitpress.html. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academic journals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers, and foundations. It is an initiative of JSTOR, a not-for-profit organization with a mission to help the scholarly community take advantage of...
Words: 9679 - Pages: 39
...With respect to what particular type of fairness did you score highest? What specific experiences contributed to this assessment? My score was the highest in Interpersonal justice in the area of fairness that I received. My interpersonal justice score reflects the relationship that I have with my superior and my perception of fairness by my supervisor (Greenberg, 2010). I work for the same company for many years and my last boss was one of the best ever. He was concerned with family first and always treated all of the leaders and line level with respect. He also promoted from with in. 2. With respect to what particular type of fairness did you score lowest? What specific experiences contributed to this assessment? Procedural justice was the type of fairness I received the lowest score for. The hospitality industry is tough. Often you work long hours and weekends. In the very beginning of your career, you work many holidays that keep you away form the family. When you first start off, the pay is not the best and you have to relocate to grow your career faster. 3. What kinds of problems resulted from any violations of any type of organizational justice you may have experienced? What could have been done to avoid these violations? For me, I feel there is a disconnect in the field due the informational justice. Often leaders in the corporate office fail to provide information and explanations to the field. For management to be successful...
Words: 356 - Pages: 2
...Are you for or against Net Neutrality? I am in favor of Net Neutrality. I believe in Net Neutrality and the freedom of speech on the Internet. Content within a site should be free to the public. By protecting open Internet, it will insure that the Internet is not own by only a hand full of key players in the industry like Google, Verizon, Comcast dominating the Internet. What are your thoughts concerning this? My major concern about net neutrality is that few key companies would dominate the Internet. It might means pushing small companies out of business due to key players in the industry would take control over the cost of Internet, speed of the Internet, and even take control of access to information over the Internet. Internet became a part of our lives and in past 10 years most of our offline activities like banking, shopping, and professional recruitment are following the trends and move to the online world. For better or for worse, the Internet is changing the way we are evolving. At “The Future of the Internet” public hearing, FCC Commissioner Mignon L. Clyburn said “New and innovative media companies are constantly starting-up today, citizen journalism is on the rise, blogs have an increasing influence on public discourse, and media providers from broadcast networks to newspapers are shifting their strategies online. For these reasons and more, I say without hesitation, that an open Internet is indeed the great equalizer. It enables traditionally...
Words: 356 - Pages: 2
...Doing Well by Doing Good Case Study: ‘Fair & Lovely’ Whitening Cream Aneel Karnani Stephen M. Ross School of Business The University of Michigan 701 Tappan Street Ann Arbor, Michigan 48109-1234 Phone: (734) 764-0276 Fax: (734) 936-8715 E-mail: akarnani@umich.edu March 2007 UNIVERSITY OF MICHIGAN Doing Well by Doing Good SMJ 07-6615 rev Doing Well by Doing Good Case Study: ‘Fair & Lovely’ Whitening Cream Abstract According to the ‘doing well by doing good’ proposition, firms have a corporate social responsibility to achieve some larger social goals, and can do so without a financial sacrifice. This paper empirically examines this proposition by studying in depth the case of ‘Fair & Lovely,’ a skin whitening cream, marketed by Unilever in many countries in Asia and Africa, and, in particular, India. Fair & Lovely is indeed doing well; it is a profitable and fast growing brand. It is, however, not doing good, and I demonstrate its negative implications for public welfare. I conclude with thoughts on how to reconcile this divergence between private profits and public welfare. Key Words: Corporate social responsibility; bottom of the pyramid 2 Doing Well by Doing Good SMJ 07-6615 rev The idea that companies can do well by doing good has caught the attention of executives, business academics, and public officials. The annual report of virtually every large company claims its mission is to serve some larger social purpose besides making profits. The theme...
Words: 4696 - Pages: 19
...Back when my mother was my age, the only media source they had was newspapers, radio, and television. Back then phones only had one function which was to communicate by voice and then came text. Now days our phone is a one stop shop for all media. All together though we do have: TV, phone, newspapers, radio, and the internet for our source media source. I personally don’t have cable anymore because of the dreaded news on each channel you turn to these days. I normally get my news from yahoo in whom I get an update in the morning and again in the evening. While serving in the Military, they told us that the only news we can really trust to be accurate was CNN and the Military News Network, that everyone else was exaggerated for higher program ratings. Should I be held accountable for their information? No. They should be, because the public values the truth and sometime the severity of it. According to Spark notes (http://www.sparknotes.com/us-government-and-politics/american-government/the-media/section3.rhtml) Printed media and Internet are unregulated. They can print whatever they want as long as they don’t slander anyone’s name. Broadcast Media is under strict regulations by the government. The FCC acts as a police agency over the airwaves. “Since the 1980s the government has loosened restrictions on media ownership, and Congress passed the Telecommunications Act in 1996 to allow companies to own even more media outlets. Due to the loosening of ownership restrictions, more...
Words: 359 - Pages: 2
...Clinical & Experimental Dermatology Research Research Article Junaid et al., J Clin Exp Dermatol Res 2014, 5:2 http://dx.doi.org/10.4172/2155-9554.1000212 Open Access Indian Cosmeceutical Market: A Study of Consumer Preferences and Consumption Patterns Abdullah Bin Junaid*, Reshma Nasreen, Ravichandran N and Faheem Ahmed Department of Management, Jamia Hamdard, New Delhi, India Abstract The study was done to investigate various factors that are associated with the consumption behaviour of the consumers in the Indian market. This study also tries to find out the new and emerging trends of the Indian cosmeceutical industry. The research first sought to explore how different variables influence the behaviour of the consumers regarding the usage of cosmeceutical product. Various factors such as self esteem, the decision making process while purchasing the cosmeceutical products etc were also studied in depth. However this study also tries to examine the various key determinants involved in the purchasing behaviour of consumers while purchasing their cosmeceutical product. The target sample was above 15 years. The sample size is 120 and the sampling method used is the quota sampling method. The study was conducted in six different cities of India that are Delhi, Mumbai, Kolkata, Lucknow, Jaipur and Patna. Among these six cities three are metro cities and the rest of the three are Tier-I cities. Delhi, Mumbai and Kolkata are the metro cities and luck now, Jaipur and...
Words: 7734 - Pages: 31
