WILMINGTON, Delaware – Silver Lake Technology Management LLC, the private‑equity arm that agreed to buy entertainment‑industry firm Endeavor for $13 billion, asked the Delaware Court of Chancery on Monday to bar billionaire Carl Icahn and dozens of hedge funds from seeking an appraisal of the shares they purchased after the deal was announced.
Legal background
Delaware corporate law permits investors who believe a merger undervalues a company to file an appraisal action. A judge then reviews valuation evidence and determines a fair price, which may be higher or lower than the agreed‑upon deal price.
Silver Lake’s argument
Silver Lake contends that the hedge funds are using the appraisal process solely for profit, calling them “opportunistic arbitrageurs” who are twisting the legal system. The firm says the ruling it seeks would protect it from potentially paying hundreds of millions of dollars beyond the agreed purchase price.
Icahn’s separate lawsuit
While Icahn did not file an appraisal claim, he has launched a separate class‑action lawsuit alleging that Endeavor’s management and Silver Lake breached fiduciary duties and diverted assets to benefit insiders. Both Icahn and the hedge funds have denied coordinating on the appraisal strategy.
Delaware law changes
Recent amendments to Delaware’s corporate statutes have made it harder to sue over deals involving large or controlling shareholders and to obtain corporate documents for conflict‑of‑interest investigations. Lawyers note an uptick in appraisal cases since the changes, suggesting investors may view appraisal as a more accessible route to challenge valuations.
Attorney for the hedge funds declined to comment on the lawsuit.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
