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Since we are asking questions, hope you don't mind me piggybacking, how does someone decide the amount they are willing to pay in such a transaction? I understa
by danvoell 10y ago
Since we are asking questions, hope you don't mind me piggybacking, how does someone decide the amount they are willing to pay in such a transaction? I understand that you pay a premium for controlling interest and for the sheer volume of the stock you are purchasing, but how does one pick the premium amount?
- bboreham 10y agoYou look at similar past deals which have gone ahead or fallen through. You sound out some large shareholders, see what they might accept. You run your own modelling - what you think it's worth, what it will cost to finance the deal. That gives you a cap on what to offer. Then you use your judgement and make a bid. After you make your bid, you will get more feedback and can raise the price if necessary.