May 13, 2014
Study: Shareholder Recover Zilch in Most M&A Settlements
According to this Cornerstone Research study, only 2% of lawsuits filed in connection with M&A deals that settled in 2013 produced monetary returns for shareholders. Here are other findings:
– Supplemental disclosures remained the only shareholder consideration in the majority of 2013 settlements.
– Over 90% of the known 2013 settlements were reached before the merger was closed.
– Average fees requested by plaintiff attorneys in 2013 declined to $1.1 million from $1.4 million in 2011 and 2012.
– Between 2007 and 2013, plaintiff attorney fee awards in M&A deals were higher in settlements with monetary consideration (by an average of 22% of the settlement fund) and with reduced termination fees (by an average of $260,000 for a 10% reduction).
– Fee awards between 2007 and 2013 also were higher in settlements with a larger-than-average number of lawsuits, and in cases where settlements took longer than average to reach.