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In re Appraisal of SWS Group, Inc., C.A. No. 10554-VCG

In a decision in the appraisal dispute over the fair value of SWS Group, the Delaware Chancery Court found in favor of Analysis Group client Hilltop Holdings Inc., which acquired bank holding company SWS Group on January 1, 2015 in a $350 million deal. After the acquisition, several shareholder groups petitioned the Chancery Court to determine the fair value of SWS Group, arguing that its stock should have been valued at $9.61 per share, nearly 40 percent higher than the deal price of $6.92.

An Analysis Group team including Managing Principal Gaurav Jetley and Principals Xinyu Ji and Chris Feige supported affiliate Peter Roth, who was retained as expert by Wachtell, Lipton, Rosen & Katz on behalf of Hilltop Holdings Inc. Mr. Roth, an investment banking expert specializing in the financial service sector, opined on the subscale nature of SWS Group's operations and the extent to which the acquisition was driven by the expectation of significant cost synergies. After a four-day trial, Vice Chancellor Sam Glasscock III determined SWS Group's fair value to be $6.38 per share, about eight percent lower than the deal price. In his ruling, Vice Chancellor Glasscock acknowledged the lack of scale of SWS Group's operations and opined that the appraised fair value being lower than the deal price is not surprising because "this was a synergies-driven transaction whereby the acquirer shared value arising from the merger with SWS." 

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Chris Feige

Chris Feige

Principal

Mr. Feige specializes in the areas of finance, securities, and financial markets. He has worked on and managed a range of securities and valuation projects in the UK and Europe. Mr. Feige has been appointed as expert in Dutch court to provide valuation and securities claims reports in support of Steinhoff’s global securities settlement, and gave evidence in the Dutch Enterprise Chamber regarding the valuation of Getir. He has also managed teams evaluating shareholder reliance and disclosure materiality and estimating counterfactual share prices in UK Financial Services and Markets Act (FSMA) Section 90A litigation matters. Mr. Feige has supported experts analyzing the volume of false and spam accounts on Twitter, Twitter’s information security infrastructure, Twitter’s data privacy and compliance with a US Federal Trade Commission (FTC) consent decree, and share price and valuation issues on behalf of Twitter in Twitter v. Musk in which Elon Musk eventually purchased Twitter at his initial offer price. In cases involving alleged market manipulation in the foreign exchange (FX) and IBOR markets, he has analyzed trade data and evaluated alleged manipulation strategies. Mr. Feige worked on USA v. Richard Usher, et al., and the Foreign Exchange Class Antitrust Litigation, analyzing FX trade and chat data, as well as competition issues; preparing experts for testimony at trial; and providing data analyses and consulting support to counsel throughout the projects. He has also worked on a range of international arbitration cases, including valuation, damages, and competition analyses. In addition, he has developed complex valuation models, including discounted cash flow models, and analyzed asset-backed securities, collateralized debt obligations, and other securitized products in support of expert testimony in a number of bankruptcy and damages matters. Mr. Feige has also worked on a number of international arbitrations valuing defaulted sovereign debt, expropriated oil fields, and retail operations. His work has been published in several industry journals.

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