control premium


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control premium

An amount paid to gain enough ownership interest to control a corporation or other entity.This would typically be an amount in excess of the simple fair market value of the shares sought to be purchased;used in business valuation calculations.

References in periodicals archive ?
in determining possible control premium relating to the share exchange ratio, SPIL's management seems to apply a double standard.
Conversely, large public companies were almost nine times more likely to rely on general market studies when supporting their control premium assumptions.
It is also designed to reduce the likelihood that any person or group would gain control of Nuance through open market accumulation or other coercive takeover tactics without paying an appropriate control premium.
In its petition filed with the Tax Court, the estate argued that the marital deduction for the 51 percent bequest to the surviving spouse should be increased by a control premium of 38.
A full cash takeover by GDF, with a control premium, may be the only way to merge the two companies whilst respecting even the most basic of shareholder rights and standards of good governance.
In 2005, the median control premium across all industries was 24%; however, the premiums vary widely in individual transactions.
Pointing out that GPG was only offering to acquire approximately 25 per cent of its shares, which, if successful, would take its total shareholding in the company to approximately 35 per cent, De Vere stated: 'This represents an attempt by GPG to obtain effective control of De Vere without paying a fair control premium or making an offer for all of De Vere's shares.
2) Thomson Financial Securities Data and other financial data services also collect control premium data.
The control premium that a buyer will pay is directly correlated to the perceived ability of the buyer to improve either factor of value.
In contrast, as third parties have noted, Mylan may be the only company in the S&P 500 which trades without a realistic possibility of a change of control premium, as highlighted by your preemptive dispatch of Teva's 48% premium bid (destroying $14 billion of potential shareholder value in the process).
That argument is typically rooted in the presence of a control premium, as the reconciliation normally results in an aggregate fair value of the reporting units that exceeds the market capitalization.
Susan Barratt, new chief executive of Eldridge said: 'The offer is an attempt to secure significant influence over the company without paying an appropriate control premium and without offering a full exit to all shareholders.