The Grand Court in the Cayman Islands has delivered its judgment in the fair value appraisal of 51job.
Under section 238 of the Companies Act (2025 Revision), shareholders of a merged or consolidated Cayman Islands company who dissent from the merger can ask the Grand Court to determine the “fair value” of their shares.
In the matter of 51job, Inc [2025] CIGC (FSD) 112 is the latest Grand Court judgment in a series of hard fought multi billion dollar disputes between companies that have been through a merger process (normally a take-private) and professional appraisal arbitrageurs, who often buy their shares in a public market after the merger is announced.
In the early appraisal cases, the Grand Court placed considerable weight on discounted cash flow valuations. In FGL Holdings, a 2022 decision, the Grand Court determined that the merger price represented fair value, meaning that for the first time the shareholders who dissented from the merger obtained no uplift via the appraisal proceeding.
In 51job, the Grand Court (Doyle J) determined that the adjusted market price of $31.11 represented fair value. The Court therefore endorsed the valuation advanced by the company in full, concluding that fair value was below both the merger consideration of $61 per share and significantly below the dissenting shareholders’ position of $111.06 per share.
The decision is significant because the Grand Court has for the first time given full weight to the adjusted market trading price. The sums at stake were also significant: the gap between the parties as to the fair value of the dissenting shareholders’ shares was some $1.7 billion.
Richard Boulton KC acted for 51job, alongside Mac Imrie KC, instructed by Caroline Moran and Malachi Sweetman and the litigation team at Maples and Calder (Cayman) LLP.
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