Israel Shaked’s research while affiliated with Boston University and other places

The record merger and acquisition activity of 2006 and 2007 ushered in renewed criticism of fairness opinions. The focus of this research is to determine whether a fairness opinion and its accompanying proxy statement provide information required for shareholders to conclude on the inherent value of the company. Our study of 105 fairness opinions supports the criticism placed on fairness opinions. We find that financial advisors provide partial information to shareholders as to the inputs used in their valuation models and similar to academic scholars, they varied greatly in their application of valuation methodologies. Shareholders are provided little information as to the inherent value of the company.