| While Goldman are culpable for at minimum the fraudulent valuation services and poor deal preparation, I would foot the blame for the overall transaction almost squarely on Dragon's CFO and a pressuring board. Regardless of the advisor, it seems clear they would have made a poor deal. What CFO does not insist on rigorous due diligence when dealing with a potential merger? This is basic finance. It is rarely the responsibility of the M&A adviser to conduct due diligence themselves. They recommend and sometimes oversee accountants and legal bodies on behalf of the client. So, this NY piece is missing a fair bit of key info about who, if anyone did due diligence on behalf of the client. In addition, the proposed changes to the terms of the deal should have been obvious flags to the CFO that there was something very wrong (if you have due diligence concerns why would you give up even more/all the cash in a deal?). Finally, anyone, but especially the CFO, should understand the incentives of the kind of advisor and buyer you hire: - if you hire a bulge bracket adviser, you can expect their primary motivation are upfront and transaction completion fees for a tiny deal and little future prospects. - if you are targetted by a buyer who is aggressive in offering a share deal, it is a clear indication that they consider their shares overvalued at that time. |