In re Appraisal of Stillwater Mining Company

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The Delaware Court of Chancery found the deal price was the fair value in this mining company acquisition.

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The petitioners in this appraisal litigation argued that the acquisition of Stillwater Mining Company by Sibanye Gold Ltd. was the result of an unfair and conflicted sale process. Defense counsel retained Cornerstone Research and David Stowell of Northwestern University to analyze the deal process.

Analysis of the deal process has become an important part of appraisal litigation. In cases such as DFC GlobalDell, and Aruba, the Delaware courts ruled that a sound sales process leads to the fair value of target companies. However, the courts left the specific threshold criteria of a process that would support the deal price to a case-by-case analysis.

Professor Stowell showed that the defendant company matched, and in many cases exceeded, industry best practices.

Professor Stowell compared the deal at issue to other recent transactions in the mining and extraction industry. He compared characteristics of the board process, marketing of the company, deal protection provisions, and executive compensation related to the change of control. He demonstrated that the defendant company matched, and in many cases exceeded, industry best practices.

The Delaware Court of Chancery ruled that “the deal price is the most persuasive indicator of fair value” of Stillwater Mining Company. In its reasoning, the court considered many of the same factors as in Professor Stowell’s analysis.


For more information on this case, contact Sasha Aganin or Olga Koumrian.

Case Expert

David Stowell

Clinical Professor of Finance,
Kellogg School of Management,
Northwestern University

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Alexander “Sasha” Aganin

Senior Vice President

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Olga Koumrian

Senior Consultant