## Facts

- Golden Telecom, Inc., a Delaware corporation operating a Russian telecommunications business, was publicly traded on NASDAQ.
- Golden’s largest stockholders, Altimo (~27%) and Telenor (~18%), also held large stakes in the acquirer, VimpelCom, creating ownership overlap.
- In 2007, VimpelCom sought to acquire Golden; Golden formed a special committee of independent directors to evaluate and negotiate.
- After a sequence of offers, Golden’s board approved a $105-per-share deal; stockholders received $105 per share via tender offer and a back-end merger in 2008.
- The special committee did not run an auction or solicit other bidders; Altimo indicated it would not support a sale to anyone other than VimpelCom, limiting potential alternatives.
- Global GT LP/Global GT Ltd., minority stockholders, dissented and petitioned for appraisal under 8 Del. C. § 262.
- At trial, both sides relied primarily on discounted cash flow (DCF) valuation but proposed widely different values ($139 per share vs. $88 per share), driven by disputes over inputs such as equity risk premium and beta.

## Issues

1. Whether the $105 merger price should be given substantial or controlling weight as evidence of statutory “fair value” in an appraisal.
2. How to determine fair value as of the merger date, including which valuation methodology and DCF inputs most appropriately reflected Golden’s risk and prospects.
3. Whether 8 Del. C. § 262 requires deference to, or a presumption in favor of, the transaction price when a special committee negotiated the deal and advisors provided a fairness opinion.

## Decision

- The Court of Chancery declined to treat the merger price as a reliable measure of fair value and performed an independent valuation.
- The court found DCF to be the most reliable method given the lack of persuasive comparable-company or comparable-transaction evidence.
- Using a court-selected set of DCF inputs (including a forward-looking equity risk premium and a blended beta), the court determined fair value to be $125.49 per share, plus statutory interest.
- On appeal, the Delaware Supreme Court affirmed, holding that § 262 does not require the Court of Chancery to defer to or presume the merger price equals fair value.

## Legal Principles

- In a Delaware appraisal under 8 Del. C. § 262, the Court of Chancery must determine fair value as of the merger date and exclude value arising from the merger itself.
- The merger price is not entitled to statutory presumptive weight; the court may give it little or no weight where the sale process is constrained or not fully competitive.
- The Court of Chancery has discretion to consider all relevant valuation evidence and to adopt, reject, or modify expert analyses.
- DCF may be the primary valuation tool when comparables are unreliable, and the court may select inputs grounded in accepted financial theory and the company’s specific risk profile.

## Conclusion

Delaware appraisal law does not impose a presumption that a negotiated transaction price equals fair value; where deal dynamics limit market competition, the Court of Chancery may set fair value through an independent DCF-based valuation, and § 262 leaves the weighting of deal price to the court’s discretion.


Global GT LP v. Golden Telecom, Inc., 993 A.2d 497 (Del. Ch. 2010)