In the matter of Shanda Games Ltd [2017] CIFsd 33 (27 July 2017)

In the matter of Shanda Games Ltd [2017] CIFsd 33 (27 July 2017)

The Court determined that fair value must be assessed independently of the merger price, using a combination of discounted cash flow and market-based methodologies, and awarded a higher value to the dissenting shareholders than the merger price.

Citation
[2017] CIFsd 33
Parties
Respondent: Shanda Games Ltd; Applicant: Minority Shareholders
Jurisdiction
Cayman Islands
Judgment Date
27 July 2017
Procedural Posture
Company Law Petition / Judgment
Outcome
judgment for applicant
Legal Topics
Fair Value Determination, Minority Shareholder Rights, Merger and Acquisition
Company Law Corporate Finance Fair Value Determination Minority Shareholder Rights Merger and Acquisition

Case Brief

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Parties

Shanda Games Ltd

Respondent

Minority Shareholders

Applicant

Procedural Posture

Company Law Petition / Judgment

Legal Issues

  1. 1 What is the fair value of shares held by dissenting minority shareholders in the context of a merger under Cayman Islands law?

Ratio Decidendi

The Court determined that fair value must be assessed independently of the merger price, using a combination of discounted cash flow and market-based methodologies, and awarded a higher value to the dissenting shareholders than the merger price.

Court Disposition

judgment for applicant

Orders

  • Respondent to pay dissenting shareholders the determined fair value per share plus interest.
  • Costs awarded to applicants.