Fairness Opinion

Term Main definition
Fairness Opinion

A professional evaluation, assessment and opinion provided for an agreed fee by an investment bank, financial advisor or valuation firm as to the fairness from a financial point of view of a transaction, usually a merger, acquisition or sale of a company. An opinion rendered for the seller of a company would relates to whether the consideration to be received by the seller or its stockholders is fair to them from a financial point of view.  A fairness opinion is frequently obtained in a merger, acquisition, disposition, stock buyback, spin-off or other transaction that is material to the company, is one in which any insiders would receive a financial benefit or is one as to which the board's decision would be held to a heightened judicial standard of review rather than the mere business judgment rule standard.