Public companies require fairness opinions (formerly fair and reasonable opinions) as part of both Johannesburg Stock Exchange (‘JSE’) and Takeover Regulations Panel (‘TRP’) regulations.
Our established corporate finance team has been accredited with the JSE to provide opinions on the fairness and where relevant, the reasonableness of these transactions. The circumstances in which a fairness opinion is required to be performed are outlined in the Companies Act and include:
- Schemes of arrangement
- Related-party transactions
- Disposal of significant assets
Our approach to fairness opinions is as follows:
- Assessing the proposed transaction
- An analysis of the entities involved and associated businesses
- A summary of the industries in which the relevant entities operate
- The trading history of the entities, including key associated businesses
- A summary of the advantages and disadvantages of the transaction
- An independent valuation of the securities involved in the transaction
- A comparison of the value of the securities vs. price vs. consideration offered
- An independent opinion, the basis of the opinion and the method and assumptions used to reach the conclusion.