February 23, 2018
In this post-trial memorandum opinion, the Court of Chancery appraised the fair value of AOL Inc.’s (“AOL” or the “Company”) stock at the time of its merger with Verizon Communications Inc. (“Verizon”) at $48.70 per share, $1.30 below the $50.00 merger price. The Court declined to defer to the merger price, finding the sales process was not “Dell Compliant,” but used that price as a check against its discounted cash flow valuation analysis.
In late March 2015, after initial discussions concerning a possible business relationship, Verizon proposed obtaining majority ownership of AOL. The AOL board of directors did not consider the Company as “for sale” and declined to put the Company up for sale, even after Verizon raised the possibility of acquiring 100% of the Company in April 2015. On May 8, 2015, Verizon made an offer for the Company at $47.00 per share. After additional negotiations, on May 11