Legal
Investment House Lauds Cayman Islands Legal System After Winning MBO Share Valuation Fight
The investment house has won, it says, a ruling in the Caribbean jurisdiction about what is regarded as the fair value of a company's shares stemming from a recent management buyout, and says the case also underscores benefits of law in the Cayman Islands.
The emerging and frontier markets specialist firm East Capital says it
has won a legal battle in the Cayman Islands to determine the
fair value of shares held in a Russian oilfield firm, saying the
outcome highlights a strength of doing business in the Caribbean
jurisdiction.
The case concerned East Capital’s involvement in the firm Integra
Group in conjunction with a management buyout of that business in
March 2014. A court ruling on 28 August resulted in East Capital
“becoming the first investor ever to conclude the full court
route to establish fair value according to Cayman Islands
Companies Law,” according to a statement from East
Capital.
The ruling, issued by Mr Justice Jones, boosted the value of
the East Capital funds’ holdings in Integra (including interest)
by 24 per cent over the MBO offer price.
Integra was incorporated in the Cayman Islands and listed on the
London Stock Exchange; after the MBO was announced, East Capital
said the offered price was beneath its fair value, the statement
continued.
“As the largest shareholder in Integra not part of the MBO
consortium, East Capital believed it was essential under these
circumstances to ensure that unit holders in the East Capital
funds received a fair value for their holdings in Integra,” it
said.
The investment firm took legal action via the Cayman Islands
Companies Law, which it said offers shareholders who disagree
with the price offered in a merger an opportunity to dissent, and
ultimately entails the Cayman Islands Grand Court determining the
fair value, should the parties fail to agree a fair price between
them.
East Capital actively manages €2.6 billion ($2.92 billion) in
public equity, private equity and real estate. It is
headquartered in Stockholm, with offices in Dubai, Hong Kong,
Luxembourg, Moscow, Oslo and Tallinn.
