The Munich Higher Regional Court has rejected the applications of minority shareholders of (the former) Sky Deutschland AG for determination of higher cash compensation. The appraisal proceedings were a consequence of the squeeze-out of the minority shareholders of the company, carried out in 2015.
The court of first instance, the Munich Regional Court I, had initially increased the cash compensation considerably in August 2018 based on two adjustments in the calculation of the discounted earnings value. Firstly, the court lowered the market risk premium used in the context of discounting the budgeted surpluses from 5.5% to 5.0% after taxes. Secondly, the Munich Regional Court I decided against a consideration of personal taxes on inflation-linked price gains. The Munich Higher Regional Court deemed the two adjustments not appropriate. It decided that a market risk premium of 5.5% after taxes for the mid-2015 cut-off date relevant in this case better reflects the general market risk and constitutes a better estimation basis. In addition, according to the Munich Higher Regional Court, the consideration of the taxation of inflation-linked price gains also results in a mathematically "more accurate" value and thus to a better approximation of the "real" or "true" value of the enterprise. The decision is final.
Hengeler Mueller represented the respondent, Sky Deutschland Holdings GmbH, in the appraisal proceedings through both instances. The team included partner Daniela Favoccia (Corporate/M&A, Frankfurt) and counsel Manuela Roeding (Corporate, Düsseldorf).