Matt Levine’s Money Stuff: The Appraisal Trade Is Back

Endeavor

For a while, appraisal arbitrage was a great little trade. Delaware — where most US public companies are incorporated — has a law that says that, if a company sells itself in a merger for cash, shareholders who object to the deal can sue for the fair value of their shares. If a company agrees to merge for $10 a share, but you are a shareholder and think it’s worth $15, you can vote no on the deal, but if a majority of shareholders vote yes then the deal will close anyway. You can then go to court and demand ...