Can a controlling buyer (i.e., a buyer that already owns over 50% of a seller's shares) that purchases the remaining outstanding shares of a seller (i.e., the remaining stake) expect to pay a premium or a discount for the purchase? In analyzing sixty-seven such transactions between January 2001 and September 2005, we found evidence that supports a remaining stake premium in the range of 30% to 45%. As a result of these findings, we explored reasons for such a premium and give a few final thoughts for additional research.
Copyright American Society of Appraisers
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