by Attorney-at-law Martin Arendts, M.B.L.-HSG
In the award procedure with regard to the squeeze-out at Deutsche Postbank AG, the County Court of Cologne announced in an unusual step that it wants to commission a university lecturer in business administration with a specialization in corporate valuation theory to check whether the standard IDW S 1, the corporate valuation standard published by the private association Institut der Wirtschaftsprüfer in Deutschland e.V. (IDW), was sustainable. In the expert opinion to be obtained, it should be checked whether the objectified company value according to IDW S 1 reaches the valuation target, according to section 327a AktG (German Stock Corporation Act) the market value of the company. According to the case law of the BGH, the theoretical market price is to be estimated, i.e. the proceeds that would be achieved if the company were sold as a whole.
The county court expresses doubts as to whether IDW S 1 is actually recognized in business administration theory and explains:
"Due to the broad criticism of business administration of the objectified company value according to IDW S 1, the Chamber has considerable doubts as to whether this value is recognized in theory, which is assumed almost without exception in court decisions. According to this, statements by IDW represent and form a recognized expert opinion as an expert opinion, a source of knowledge for the methodically correct procedure in the fundametalanalytical determination of the company value.
See OLG Stuttgart, decision of June 5, 2013 - 20 W 6/10 -, Rn. 144, juris
Currently, the Chamber only assumes that IDW S 1 is recognized and applied by the auditor's own profession, but is not theoretically recognized by business administration. Only the capitalized earnings method on which IDW S 1 is based is theoretically recognized, but not the objectified company value according to IDW S 1. However, the capitalized earnings method does not necessarily lead to correct and theoretically recognized values, but only to appropriate values.
Cf. Böcking/Rauschenberg in: Fleischer/Hüttermann, Legal Handbook on Company Valuation, 2nd Edition 2019, Business Valuation Theory, Section 2, par. 2, 15.
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According to the Chamber's current assessment, the objectified value according to IDW S 1 only represents the minimum value for the company. This value can still be below the subjective marginal prices of the minority shareholders, at which they can withdraw without disadvantage. A fortiori, the objectified company value does not reflect a market value in the sense of section 194 BauGB or 9 par. 2 BewG."
The County Court of Cologne therefore wants to ask the expert to answer the following questions:
"1. Can the objectified company value according to IDW S 1 apply from a theoretical point of view as a sustainable approximation of the market value of the company?
2. From a theoretical point of view, can the objectified company value according to IDW S 1 apply as a sustainable approximation to the marginal price of minority shareholders?
3. If applicable:
a. Is it possible to reliably determine the market value of the company using theoretically accepted valuation methods?
b. With which valuation methods - possibly also in parallel application - can the best possible approximation to the market value of the company be achieved?
c. Can fair value or fairness opinion approaches be taken into account?
d. Is a typification of subjective characteristics (e.g. a typical market buyer) possible to approximate the market value? Which typification is appropriate then?
e. Or should at least two standardized decision values (marginal price of a seller and marginal price of a buyer) be included in an approximation of the market value?"
The participants to the proceeding can comment until March 17, 2021.
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