Deloitte Financial Advisory Services has introduced a service that issues fairness opinions on the consideration offered to companies on financial deals such as mergers, acquisitions, going-private transactions and divestitures.
Fairness opinions from outside advisors are often sought by a board of directors to satisfy their fiduciary duties. Deloitte wanted to offer the service to give clients more of a choice in providers.
"Historically companies would rely on their investment bankers to provide the fairness opinion, but over the course of the last few years questions have been raised about the independence and objectivity of advisors on the fairness of a deal," said Chris Ruggeri, national M&A leader for Deloitte FAS (shown here). "As we talked to our clients and our contacts, what we found is that increasingly there seems to be a tendency for boards of directors to more closely scrutinize the objectivity of those providing the fairness opinion."
The service is new for Deloitte in the United States, though the firm has provided fairness opinions in Europe. "There's no legal requirement for a fairness opinion, but they've become common practice in the United States," said Ruggeri. "It's typically a way for the board of directors of a company to do some additional due diligence from a financial point of view."
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