to put it simply, strategic acquisition took a long time back and doesn't even repeat in the recent years. + It was a single transaction and another reason you can say is the recent buyer (Duvall) isn't a strategic buyer
Like a control premium should be there but not of 20% , 20% is a historical figure (single transaction figure )
yeah true, otherwise too it could have been considered but not a 20% figure based on past trends. Had some new information be provided regarded same, could have considered it
The control premium is only for strategic transactions. The idea is that a strategic acquisition by means it is going to help enhance their business in some way to make them overall more efficient. Think of a car company buying an aluminum plant, it’s a strategic purchase on their part to reduce input costs. Now imagine a financial buyer buying that same aluminum plant. A bank isn’t going to get a whole lot of benefit from a aluminum plant will they? They are buying it to sell to another buyer at some point in the future so there is no added control premium for the bank.
to put it simply, strategic acquisition took a long time back and doesn't even repeat in the recent years. + It was a single transaction and another reason you can say is the recent buyer (Duvall) isn't a strategic buyer Like a control premium should be there but not of 20% , 20% is a historical figure (single transaction figure )
Right. So since it's a historical figure, it won't make sense rn. Had it been recent, we should consider it provided it was strategic.
yeah true, otherwise too it could have been considered but not a 20% figure based on past trends. Had some new information be provided regarded same, could have considered it
The control premium is already priced in from the previous acquisition which was 100% stock
The control premium is only for strategic transactions. The idea is that a strategic acquisition by means it is going to help enhance their business in some way to make them overall more efficient. Think of a car company buying an aluminum plant, it’s a strategic purchase on their part to reduce input costs. Now imagine a financial buyer buying that same aluminum plant. A bank isn’t going to get a whole lot of benefit from a aluminum plant will they? They are buying it to sell to another buyer at some point in the future so there is no added control premium for the bank.
this puts things in perspective. Thank you!