Merion Capital LP v. BMC Software Inc., C.A. 8900-VCG (October 21, 2015)

This decision illustrates the dangers of appraisal arbitration.

When the merger price is the product of a full market check by a disinterested Board without interference from a controller and is approved by the stockholders, the Court of Chancery is inclined to give that price weight in an appraisal proceeding. Even though the Court is required to do its own valuation, when that concludes the merger price is close to its independent calculation of value, the Court may well accept the merger price, leaving the arbitrageurs disappointed.