A shareholder fair-value dispute.
- 01€540mEquity in dispute
- 023Expert reports filed
- 034 daysEvidentiary hearing
- 04SCCArbitral institution
Our team was appointed by the majority shareholder’s counsel after a minority investor exercised a put option at fair value—a matter turning on the reliability of management forecasts and whether minority and marketability discounts applied under the shareholders’ agreement.
The question
The shareholders’ agreement required the exit price to reflect fair value but left the method undefined. The tribunal needed to decide how to value a private industrial group with uneven recent earnings, and whether the minority stake should be priced pro rata or at a discount.
Our approach
We valued the group using discounted cash flows cross-checked against trading multiples and precedent transactions. Management forecasts were benchmarked against historic achievement and budget variances, and we presented the discount question as a separate, clearly signposted step so the tribunal could decide it as a matter of contract.
The evidence
The investor’s expert relied on an aspirational board plan that the business had missed in each of the preceding four years. Our reconciliation of forecasts to outcomes proved decisive, and the experts’ joint statement narrowed the remaining disagreement to the discount question alone.
The outcome
The tribunal adopted our forecast adjustments and applied a pro rata basis without discount, as the agreement’s wording required. The resulting value sat close to the midpoint of our range, and the parties completed the transfer within weeks of the award.
A forecast earns its weight from the track record behind it, not the ambition within it.