Highfields v. AXA Financial, Inc., C.A. No. 804-VCL (August 27, 2007)

In a major defense victory in a statutory appraisal case, the Delaware Court of Chancery found that the fair value of The MONY Group Inc. ("MONY") was $6.03 less than the $31.00 per share price AXA Financial, Inc. ("AXA") agreed to pay to acquire MONY in July of 2004. Petitioner Highfields Capital had argued that the fair value of MONY at the time of the merger was in the range of $37-$47 per share.

The Court accepted AXA’s valuation methodology, which relied predominantly upon an industry-specific actuarial appraisal analysis, as well as a valuation approach that relied heavily on the actual price negotiated in the arms-length transaction minus synergies arising from the merger, which the Court found to account for nearly 20% of the merger consideration. In so doing, the Court rejected the petitioner's reliance on three traditional valuation methods, emphasizing the importance of relying on industry-specific valuation methods and looking to "the merger price in an appraisal proceeding that arises from an arm’s-length transaction."

Young Conaway's Corporate Counseling and Litigation Section handled the litigation of this matter, which involved the review and production of over one million documents and the testimony of numerous expert and fact witnesses, including principals of Highfields, which had been a vocal opponent of the AXA/MONY merger, members of AXA’s actuarial team, and former MONY directors and management. The examination of witnesses at trial and presentation of post-trial oral argument was split by partners Bruce Silverstein and Marty Lessner.


Express Scripts, Inc. v. Crawford, Delaware Court of Chancery, C.A. No. 2663-CC (Feb. 23, 2007)

In one of the most hotly contested takeover battles of the year, Express Scripts obtained a preliminary injunction in aid of its efforts to effect a hostile acquisition of Caremark for approximately $26 billion. Although Caremark's stockholders ultimately voted to approve an acquisition by CVS (after CVS upped its offer by an additional $3.3 billion), Express Scripts obtained significant judicial relief that increased its opportunity to achieve its business objectives. Additionally, the Delaware Court of Chancery issued important guidance respecting the nature of the disclosures required of a target company in a bidding contest and resolved an issue of first impression pertaining to the availability of appraisal rights where a merger is funded, in part, by a special dividend. The Court of Chancery also identified, but did not resolve, important issues respecting the validity and propriety of various deal protection measures adopted by Caremark and CVS.

Young Conaway handled the litigation of this matter and assisted Skadden, Arps, Slate, Meagher & Flom LLP in connection with advising Express Scripts on the transaction. Within the firm, the Corporate Counseling and Litigation Section carried the laboring oar, with the formal presentation in the Court of Chancery.