Reading a Fairness Opinion: What the Selected-Transaction Analysis Tells You

When a public company negotiates a merger, its board typically commissions a financial adviser to render a fairness opinion — a formal written opinion that the consideration to be received by common stockholders is fair, from a financial point of view. That opinion is filed with the SEC and attached to the proxy statement or tender-offer recommendation that shareholders receive before they vote or decide whether to tender.

The fairness opinion is one of the richest publicly available sources of disclosed precedent transaction multiples. The adviser’s selected-transaction analysis names the comparable deals it considered, reports the multiples it observed, and places those multiples in relation to the implied multiple from the deal being analysed. For a practitioner building a precedent set, this is useful — and it requires careful reading.

Where fairness opinions appear in public filings

A fairness opinion shows up in different forms depending on the transaction structure.

Transaction type	Primary filing	Section to locate
Merger requiring shareholder vote	Form DEF 14A (proxy) or DEFM14A (merger proxy)	“Opinion of financial adviser” or “Fairness opinion”
Tender offer	Schedule 14D-9 (target recommendation statement)	Board recommendation section; opinion usually attached as exhibit
Going-private transaction	Schedule 13E-3	Same as above
Merger proxy with stock consideration	Form S-4 or S-4/A	Proxy/prospectus section, similar structure

All of these are searchable through EDGAR. For mergers with a shareholder vote, the DEF 14A or DEFM14A is the primary document. For tender offers, the Schedule 14D-9 is where the target’s board explains its recommendation and includes, or incorporates by reference, any fairness opinion it received.

What the disclosure rules require

Under Regulation M-A, a transaction filing that includes a fairness opinion must disclose:

whether the filing party solicited or received any report, opinion, appraisal or negotiation related to the consideration or the fairness of the transaction;
the identity of the person who prepared it;
a brief description of the procedures followed, the findings and the recommendations;
the instructions received from the filing party; and
any material relationships between the preparer and the filing party or its affiliates during the prior two years.

In practice, the proxy section dedicated to the fairness opinion typically runs ten to thirty pages. It summarises the adviser’s analyses in enough detail to allow a reader to understand the methodology, even if the underlying financial models are not filed as exhibits.

The structure of a typical fairness opinion section

The analyses underlying a fairness opinion follow a recognisable pattern, though the exact structure varies by adviser and transaction.

Analysis type	What it covers
Selected public companies	Trading multiples of publicly traded comparable companies
Selected transactions	Multiples paid in comparable M&A transactions — the precedent set
Discounted cash flow	DCF valuation using management or adviser projections
Premiums paid	Control premiums over unaffected trading prices
Leveraged buyout (where applicable)	LBO return analysis, common in PE transactions

The selected-transactions analysis is the section most directly relevant to building or cross-checking a precedent set.

Reading the selected-transactions analysis

The selected-transactions section typically opens with a brief description of the screen the adviser applied — the industry or sector, the approximate deal-size range and the time period considered. It then lists the transactions by target name and acquirer, followed by a table of multiples.

The multiple table typically includes:

enterprise value of the transaction (sometimes equity value if the adviser is presenting a premium analysis instead);
the financial metric used in the denominator (revenue, EBITDA, EBIT or a combination);
the period label (LTM or “last twelve months” as of a stated date, occasionally forward);
the resulting multiple for each transaction; and
summary statistics — mean, median, 25th percentile, 75th percentile, or a “selected range” that the adviser has chosen to highlight.

At the bottom of the analysis, the adviser shows where the deal under review falls relative to that range, using the implied multiple derived from the transaction consideration and the target’s own financial metrics.

What “reported” and “calculated” mean in this context

A fairness opinion usually does not disclose whether individual multiples were sourced from a data terminal as reported or calculated by the adviser from underlying financial statements. It also rarely distinguishes reported EBITDA from adjusted or normalised EBITDA.

The multiple you see in the table is the adviser’s figure. If it differs from a figure you calculate independently, the difference is likely one of:

EBITDA definition — the adviser may have used a company-reported adjusted figure;
financial period — the LTM cutoff date may differ from the one you use;
enterprise value — the adviser’s EV figure may include or exclude certain adjustments; or
version of financial data — the adviser may have used information available at the time it rendered the opinion, which may predate subsequent restatements.

For each transaction in the adviser’s list, treat the multiple as a starting point and verify it independently against the underlying SEC filings before relying on it in your own analysis.

Using the adviser’s selected set as a starting point

The adviser’s screen reflects a judgment about comparability that was defensible at the time and for the specific purpose of the fairness opinion. That judgment may be narrower or broader than what you would apply when building your own set.

Common reasons the adviser’s set differs from what a practitioner would independently construct:

The screen is tighter on timing. Advisers often use a two- to five-year lookback. A broader sector study might reach back further to capture a full M&A cycle.

The screen is tighter on size. An adviser presenting a $5 billion deal may exclude transactions below $500 million. A practitioner with fewer large-deal comparables might need to widen the size band and apply a discount-for-size observation rather than excluding smaller deals entirely.

It excludes announced-but-not-completed deals. Most advisers use completed transactions where final consideration is confirmed. This is the right approach for a settled multiple but may leave out recent activity if the market has moved quickly.

It uses as-reported, not normalised, financials. Advisers working under time and scope constraints may not recast EBITDA across the set for IFRS 16 operating lease treatment, owner compensation, or non-recurring items. Two transactions that look comparable on the table may have different effective multiples after normalisation. See the EBITDA normalisation guide for how to approach this.

It may not flag announced vs completed status. If the adviser included some signed-but-pending transactions, the multiples may reflect an element of deal risk or negotiation uncertainty that completed-deal multiples do not carry. The announced vs completed distinction matters for how the multiple is interpreted.

Key limitations to document

When you record a transaction from a fairness opinion’s selected-transaction table, the following limitations should be noted alongside the data:

Adviser conflicts. The fairness opinion section discloses the adviser’s existing and prior relationships with the filing party and, in most cases, with the counterparty. An adviser who has significant ongoing investment banking relationships with the acquirer has a financial interest in the deal closing. This is a disclosed conflict, not a disqualifying one, but it is relevant context for understanding the selection.

Selection serves the opinion, not pure objectivity. The adviser selected transactions it considered comparable for the purpose of delivering an opinion on a specific deal. The selected set is not the output of a neutral search. It may be narrower than the full universe of comparable transactions, and the exclusions may not be fully explained in the proxy.

Opinion date versus proxy date. The fairness opinion is rendered at a specific date — often around signing or immediately before the proxy is filed — and the financial data it uses reflects information available at that date. A proxy filed months later may present a market environment that has shifted materially.

Period inconsistency within the table. When the proxy discloses “LTM EBITDA,” the LTM periods for the individual transactions in the selected set may be measured at different dates. An older transaction may use a period two years before announcement while a recent transaction uses one month before announcement. The adviser’s table typically does not annotate each transaction’s LTM cutoff date.

Connecting the fairness opinion to the underlying filings

The fairness opinion lists transactions but usually does not cite specific SEC accession numbers. To verify a multiple independently, you need to identify the underlying transaction filings:

Search EDGAR for the target company’s merger-related filings (Form 8-K at signing, proxy or S-4, completion 8-K).
Confirm the enterprise value from the consideration and net debt disclosed at announcement.
Identify the target’s financial metric from the most recently filed annual or quarterly report prior to announcement.
Calculate the multiple yourself, noting the EBITDA definition, the period and the EV composition.

The SEC filing map describes which document to use for each piece of the reconstruction. Once you have verified the underlying data, you can decide whether to include the transaction in your own set under your own screen criteria, independent of the adviser’s judgment.

Integrating fairness opinion data into a precedent set

A practitioner using fairness opinions as a research source should maintain clear attribution for each transaction.

Field	What to record
Source proxy	EDGAR accession number, filing date, filer
Fairness opinion date	The date on the opinion letter, not the proxy filing date
Adviser name	Full firm name as disclosed
Transaction listed	Target and acquirer names
Multiple disclosed	Metric, period, value as stated in the proxy table
Independent verification	Whether you have cross-checked against the underlying filing
Normalisation applied	Any adjustments you made that differ from the proxy figure

Maintaining this attribution disciplines the analysis and makes the selection defensible. If a counterparty or regulator asks why a specific transaction appears in your set, you can trace it either to your own independent research or to a named adviser’s selection with clear caveats about what was and was not verified.

For the equity value and enterprise value distinctions and LTM period selection that underpin any multiple you extract from a fairness opinion, those methodology articles address the specifics. For understanding how the multiple table connects to a valuation range, start from the implied multiple the adviser shows relative to its selected range, then apply the same logic to your independently constructed set.

Documentation checklist

For each transaction sourced from a fairness opinion:

Proxy accession number and SEC filing date recorded
Fairness opinion date (from the opinion letter, not the proxy date)
Adviser name and disclosed conflicts noted
Transaction screen criteria described in the proxy noted
Multiples recorded as stated in the proxy table, with the period label
Independent verification status noted (verified / to verify / unverifiable)
Any normalisation or restatement applied recorded separately from the proxy figure
EV definition checked — whether proxy EV includes minority interests, assumed debt, excess cash adjustments

PrivyLogic provides searchable precedent transaction data to help identify deals for cross-checking or extending an adviser’s selected set. Verify material figures against the underlying public filings before relying on them. Review access options or contact the team for an enterprise query.

Sources

Proxy Statements (Form DEF 14A) — Merger Transaction Disclosures — U.S. Securities and Exchange Commission EDGAR; accessed September 20, 2026
Schedule 14D-9: Solicitation/Recommendation Statement — Electronic Code of Federal Regulations; accessed September 20, 2026
Mergers and Acquisitions — Division of Corporation Finance — U.S. Securities and Exchange Commission; accessed September 20, 2026