Fairness Opinions for Business Transactions
Independent financial validation of Share Swap Ratios and M&A valuations. Protect your Board and Shareholders with expert Fairness Opinions from SEBI-registered Merchant Bankers.
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What is a Fairness Opinion?
A Fairness Opinion is a formal report issued by an independent financial advisor - typically a Merchant Banker - that evaluates whether the financial terms of a proposed transaction, such as a merger or acquisition, are fair from a financial point of view. It is not a valuation itself, but a "second look" at an existing valuation report to ensure that the methodology, assumptions, and final price are reasonable.
At Biz Valuations, we provide an objective layer of protection for directors. While a valuer determines the "Price," we determine if that price is "Fair" to all stakeholders. Our opinions serve as a critical defense against litigation and are a regulatory cornerstone for listed companies undergoing structural changes.
Why You Need a Fairness Opinion?
In high-stakes corporate actions, a Fairness Opinion acts as an insurance policy for the Board of Directors. We provide defensible opinions for:
Mergers & Acquisitions (M&A)
Validating the Share Swap Ratio to ensure shareholders of both the transferor and transferee companies are treated equitably.
Related Party Transactions
Providing transparency in deals involving promoters or group companies to prove "Arm’s Length" pricing.
Going-Private Transactions
Protecting minority shareholders when a majority owner seeks to delist or buy back all outstanding shares.
Buyouts & Takeovers
Assisting Special Committees in evaluating whether a tender offer or buyout price is adequate.
Corporate Restructuring
Reviewing demerger ratios and spin-off valuations to satisfy NCLT and SEBI requirements.
Who Needs a Fairness Opinion?
Independent Oversight for Strategic Decisions
Our team provides specialized review services across the corporate landscape:
Key Benefits of Working with Biz Valuations
Choosing an independent firm for a Fairness Opinion ensures that the review is truly unbiased and technically sound.
Transactions We Review
We offer expert analysis for a wide range of corporate triggers:
Our Analytical Approach
While we do not perform a primary valuation, we execute a rigorous quantitative and qualitative review:
Methodology Validation
Reviewing the DCF, Market Multiples, and Asset-based models used in the original valuation for consistency.
Sensitivity Analysis
Testing the "Existing Valuation" against different market scenarios and growth assumptions.
Benchmarking
Comparing the proposed transaction multiples against Precedent Transactions and listed peer groups.
Synergy Assessment
Evaluating whether the expected "Value Addition" from the merger is realistically reflected in the terms.
Regulatory Compliance & Standards
Our Fairness Opinions are structured to meet the most rigorous legal requirements in India:
- SEBI Circular (2017/21): Compliance for listed companies involved in schemes of arrangement.
- SEBI (LODR) Regulations: Ensuring fair treatment of public shareholders in all material transactions.
- NCLT Guidelines: Providing the necessary "Independent Advice" required by the Tribunal for approving mergers.
- Companies Act, 2013: Supporting the Board’s fiduciary duties under Section 166.
Our 4-Step Fairness Roadmap
1. Scope & Conflict Check
We define the engagement and ensure we have no prior interest in the deal parties.
2. Due Diligence
We review the Existing Valuation Report, transaction documents, and management's financial projections.
3. Analysis & Committee Review
Our internal committee reviews the findings to ensure the "Fairness" threshold is met.
4. Issuance of Opinion
We deliver the formal Fairness Opinion Letter, confirming whether the terms are fair from a financial point of view.
Specialized Fairness Services
We go beyond the "Opinion Letter" to provide detailed insights.
Board Books & Presentations
Creating detailed presentations that explain our findings to the Board or Special Committee.
Second Opinions
Providing a fresh look when an existing valuation is being challenged by auditors or minority shareholders.
Relative Valuation Review
Ensuring that the "Weights" assigned to different valuation methods in a Swap Ratio are balanced and fair.
Transaction Structure Analysis
Evaluating the impact of stock vs. cash consideration on shareholder value.
Adequacy Opinions
Specifically for hostile takeovers, assessing if an unsolicited bid is "inadequate" for the target's shareholders.
Protect Your Deal. Empower Your Board.
In an era of active shareholders and strict regulation, an "adequate" price isn't enough - it must be "Fair." Don't leave your transaction open to challenge.
Partner with Biz Valuations for an independent, SEBI-compliant Fairness Opinion.
- Built on Experience
- Trusted Across 1,600+ Projects
- Confidence of Leading Businesses
Frequently Asked Questions (FAQs)
1Is a Fairness Opinion the same as a Valuation?
No. A valuation tells you what a company is worth; a Fairness Opinion tells you if the specific price offered in a deal is fair based on that value and other market factors.
2Who is authorized to issue a Fairness Opinion in India?
Per SEBI norms, for listed companies, a Fairness Opinion must be issued by a SEBI-Registered Category-I Merchant Banker.
3Can the same firm do the Valuation and the Fairness Opinion?
To ensure independence and avoid conflicts of interest, regulators and best practices strongly recommend that the Fairness Opinion be provided by a different firm than the one that did the primary valuation.
4Does a Fairness Opinion recommend a deal?
No. We do not tell the Board whether they should do the deal; we only certify whether the financial terms are "fair." The final business decision rests with the Board.
5What is a 'Swap Ratio' review?
It is a specific analysis of the exchange of shares in a merger. We check if the ratio accurately reflects the relative values of the two companies to prevent one set of shareholders from being unfairly diluted.
6What happens if the Opinion says the deal is 'Unfair'?
This is known as an Inadequacy Opinion. The Board may use this to renegotiate the price or recommend that shareholders reject the offer.
7How long does it take to issue a Fairness Opinion?
Typically 5 to 10 business days, as we must thoroughly review the existing valuation and the transaction structure.
8Is a Fairness Opinion required for private companies?
While not always legally mandated for private firms, it is highly recommended if there are "Related Party" transactions or if there are multiple classes of shareholders.
9Does the NCLT require a Fairness Opinion?
Yes, for listed companies filing a Scheme of Arrangement, the NCLT requires a Fairness Opinion on the Share Swap Ratio.
10What is the 'Business Judgment Rule'?
It is a legal principle that protects directors from liability if they make informed, good-faith decisions. Obtaining an independent Fairness Opinion is a key way to prove that a decision was "informed."