What is a control bonus?
Control bonuses are the amount above the market value of shares in the company that the buyer is willing to pay to gain control of the company. People in the process of attempting to purchase control shares are willing to pay more than these shares are worth, because the ability to control the outcome of votes and other events is considered special expenses. People who were aware of the control bonuses can get it a better price for their stocks during an attempt to take over. On the contrary, there is a minority discount, a reduction in the value of shares for buyers who do not receive a control stake in the company with their purchase. A person who already owns a large number of shares, such as 35% of the company, is often willing to pay a high control premium because the person is already on the way to the ownership of the control share. If there is a limited number of sharingers, the stock price may also rise because people will be well aware of the receipt attempt and can appreciate their shares corresponding to higher.
business value is also a consideration. The control share of valuable or growing societies is usually worth more than a share in a society with a lower or weak up. People can also consider the potential of industry as a whole and also problems such as general economic comfort. Another problem may be how badly a person wants control; Someone who desperately wants to expel members of the Board of Directors may be willing to pay a high control bonus to do it.
When people start buying shares when attempting to take over, they are usually discreet in order not to save people. They can buy proxes to cover what they do. As people are more aware of the attempt, control bonuses can rise, because people will be higher prices for selling, because the buyers feel the motivation and willingness to pay a higher price.
When people prepare to take over, they can sit down and decide at the beginning how much surviving market value arewilling to pay. Determining clear goals after consultation with all available information will allow people to develop a suitable purchase strategy to get control without spending more money than wise. If an attempt to take over, the person may try to try again later.