When a Fairness Opinion is Necessary

What this video covers

• The exact scope of a fairness opinion: "fair, from a financial point of view" and why it never guarantees best price, highest price, or non-financial fairness
• Why both buy-side and sell-side boards can seek opinions, and the exam trap of pairing both sides with the same investment bank
• The four deal patterns that typically trigger a fairness opinion: public-company shareholder votes, going-private transactions, related-party or conflicted deals, and stock-for-stock consideration
• When a special committee of independent directors must commission the opinion, and why the full board recuses itself in management buyouts (MBOs)
• The distinction between state corporate law governing the board's duty of care and industry regulatory rules governing the advisor's disclosures
• Why a fairness opinion supports the duty of care defense but does not satisfy or replace independent board review
• How to spot wrong answer choices that claim the opinion covers employees, communities, regulators, long-term strategy, or deal soundness