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Litigation Support: The Case of Infratil versus Natural Gas Corporation
Case 9 20 2011 002
Case published in the International Journal of Case Studies in Management, Vol. 9, No. 2
Author : 
Languages : 
  • English
Keywords: 
  • Event study,
  • Expert evidence
Year of production : 
2011
Registration date : 
2011-06-15
Teaching notes included : 
Yes
Abstract

This case requires input into an arbritation where the arbitrator is required to determine a "fair and reasonable price" when a shareholder voted against a major transaction and the majority voted in favour. This gave the shareholder the right to be bought out at a "fair and reasonable price."

Primary domain : 
Finance
Secondary domain : 
Not available
Sectors : 
  • Transportation and warehousing,
  • Utilities
Source : 
Elsewhere
Type : 
Traditional case 
Type of data used in the production of the case : 
Undefined
Event location : 
New Zealand
Year of start of the event : 
2000
Year the event ended : 
2000
Business size : 
NZ$750m
Teaching objectives
  • The notion of capital market efficiency and its importance as a basis for using a share price-oriented analysis to determine a “fair and reasonable price,” or in any dispute resolution;
  • Issues of liquidity (the pricing of liquidity, discounts on sales of blocks of shares, and the practical measurement of liquidity); Rights issues versus private placements;
  • Measurement of “abnormal” returns or price changes;
  • The relevant date(s) for determining the “fair and reasonable price” or the period over which “abnormal” price changes are computed;
  • Some technical issues associated with cash flows (dividends and new investments) affecting shareholders over the relevant period;
  • The relevance of alternative approaches to determine a “fair and reasonable price,” for example, discounted cash flow approaches.