In the matter of Shanda Games Ltd [2017] CIFsd 16 (25 April 2017)
The court held that fair value under section 238 of the Companies Law must be determined without applying a minority discount, as the statutory appraisal process is designed to ensure minority shareholders receive the full pro rata value of their shares in the context of a merger.
- Citation
- [2017] CIFsd 16
- Parties
- Respondent: Shanda Games Ltd; Applicant: Minority Shareholders
- Jurisdiction
- Cayman Islands
- Judgment Date
- 25 April 2017
- Procedural Posture
- Company Law Petition / Final Judgment
- Outcome
- judgment for applicant
- Legal Topics
- Fair Value Determination, Minority Shareholder Rights, Statutory Appraisal, Mergers and Acquisitions
Case Brief
Summary, issues, holding and outcome
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Parties
Shanda Games Ltd
Respondent
Minority Shareholders
Applicant
Procedural Posture
Company Law Petition / Final Judgment
Legal Issues
- 1 What is the fair value of shares held by dissenting minority shareholders in Shanda Games Ltd following a merger?
- 2 Should the court apply a minority discount in determining fair value under section 238 of the Companies Law?
Ratio Decidendi
The court held that fair value under section 238 of the Companies Law must be determined without applying a minority discount, as the statutory appraisal process is designed to ensure minority shareholders receive the full pro rata value of their shares in the context of a merger.
Court Disposition
judgment for applicant
Orders
- Shanda Games Ltd is ordered to pay dissenting shareholders the fair value of their shares without applying a minority discount.
- Costs awarded to the applicants.
Full Case Text
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