What is acquiring control worth in the UK?

BVWire–UKIssue #2-2
May 21, 2019

discounts & premiums
control premium, factset mergerstat, mergers and acquisitions (M&A), public company data, implied minority discount

Quite a bit, it turns out—30%. Current data (including Q1 2019 updates) from the FactSet Mergerstat/BVR Control Premium Study (CPS) show that UK buyers value the future benefits of controlling interests higher than nearly anywhere else in the world (the graph below compares acquisition premiums and the related implied minority discounts from the leading economies). The premium is measured as the percent difference between the target’s prior trading price and the per-share takeover price in the acquisition. The implied minority discount is the inverse of this—it is the percentage difference between the per-share takeover price in the acquisition compared with the target’s prior trading price. Business valuers use these premia to benchmark the value of private assets where control changes hands.

BVWire UK May 21 2019 CPS

CPS contains nearly 12,000 public company transactions from companies traded on every major world exchange and details up to 57 data points and up to five valuation multiples for each transaction. Most transactions are mergers and acquisitions with 100% shares acquired and include controlling takeovers and buyouts.

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