“As is typical, the outcome of this appraisal proceeding largely depends on my acceptance, rejection, or modification of the views of the parties’ valuation experts.” —Strine, Vice Chancellor 

Facts: Golden Telecom, Inc. (Golden), was a Russian-based telecommunications company that was listed on NASDAQ. The shares of Golden were purchased for $105 per share by Vimpel-Communications (VimpelCom), a major Russian provider of mobile telephone services whose largest stockholders were also the largest stockholders of Golden. Golden’s management recommended that stockholders accept the offer. A total of 94.4 percent of Golden stockholders tendered their shares at the $105 offer price. The remaining stockholders exercised their appraisal rights. At trial, Golden’s valuation expert witness came up with the value of $88 per share, pointing out that Golden stockholders received a generous $105 for their shares. The dissenters’ valuation expert came up with a value of $139 per share, claiming that the $105 offer price was too low. 

Issue: What is the appraisal value of Golden stock? 

Language of the Court: As is typical, the outcome of this appraisal proceeding largely depends on my acceptance, rejection, or modification of the views of the parties’ valuation experts. After making my determinations, I generated a per share value of $125.49 per share, which I supplement with an award of interest at the applicable statutory rate. 

Decision: The court entered judgment that Golden shares were worth $125.49 per share at the time of the merger. The dissenting shareholders were awarded the $20.49 per share above the $105 offer price. 

Ethics Questions: Did Golden’s management act ethically in recommending $105.00 per share? Was there any conflict of interest in this case?