Fairness Opinion Q&A

What is a fairness opinion?

• A fairness opinion is a form of valuation analysis, which differs from other valuation analyses in that it evaluates the value received in the transaction in addition to the value exchanged.
• Thus, a fairness opinion is an assessment of the financial details of a business transaction, evaluating whether the proposed consideration is fair from a financial point of view to a particular party.
• Fairness opinions typically culminate in a formal, written opinion to the engaging body (e.g. a special committee of the board of directors) making the fiduciary decision to proceed or not with the proposed transaction.
• Importantly, fairness opinions do NOT constitute recommendations to proceed with a transaction for many reasons, including because fairness opinions do NOT address the transaction from an accounting, insurance, legal, regulatory, tax or other point of view.

This Q&A is not intended to constitute or substitute experienced legal counsel, accounting advice or tax consulting.