Pointing to significant regulatory uncertainty and a depressed market, the Delaware Court of Chancery considered three factors to determine that a private equity firm underpaid for DFC Global Corp. when it bought the payday lender for $9.50 per share in 2014.
Because market turmoil called into question the reliability of the transaction price as the fair value for the merger, Chancellor Andre G. Bouchard gave equal weight to his own discounted cash flow analysis, an expert’s comparative companies analysis and the actual deal price to conclude that DFC should actually have been valued at a price of $10.21 per share in April 2014.
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