In the world of mergers and acquisitions, the running joke
is that there is nothing fair about fairness opinions. This is,
in part, indicative of a common misconception: a fairness
opinion is not intended to determine whether the financial
terms of a transaction are the best possible terms available.
Rather, a fairness opinion is intended to opine on whether the
financial terms of a transaction are fair.
Recently, however, the joke has taken on a different meaning
as even the fairness of fairness opinions has been called into
question. In recent months, articles in newspapers have grabbed
readers' attention with headings such as "Fairness opinions
fatten fees as banks 'rubber stamp' mergers" (Bloomberg.com),
"Mirror, mirror, who is the unfairest" (The New York Times) and
"Just how fair are fairness opinions" (The New York Times).
Most of these articles have focused on the more sensational
examples of valuation discrepancies underlying fairness...