Fairness Opinions on Mergers

    Six months ago Symantec announced that it would acquire Veritas Software.  Investors in Symantec recognized the deal was terrible for the company and pounded the stock.  Since the deal was a stock swap, the falling price of Symantec meant that the Veritas shareholders lost any price premium on the deal.  Yet Symantec was able to hire two investment bankers who issued "fairness opinions" on the price (Lehman  Brothers for Symantec and Goldman Sachs for Veritas).  Why?  The fairness opinions are paid for by the managements seeking to push through the deal (some are even contingent on the deal closing).  Managers pay big fees for a rubber stamp from a big name bank.  This "fairness opinion" charade needs to stop.  The investment bankers should be liable (without indemnification rights) to the deal's shareholders if the opinions prove to be substantially off and the managers should be liable personnally  for the fees as a waste of corporate money.  Moreover, in all cases, the managers should reveal whether or not any other investment bankers, contacted even informally, refused to give an opinion and the opinions should come with a disclamer ("Paid out of corporate funds by your managers who support the deal.")