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In Chakula MJ21 Q1ciii, when evaluating other factors that Laha’s shareholder and Kawa’s shareholder would consider before agreeing to the acquisition, the examiner said that :
Kawa’s shareholders own 36% of share capital of combined company. However, they would be minority shareholder and do not have significant influence in major decision.
Laha’s shareholder concerns that Kawa’s shareholder will own 36% portion of the combined company, meaning that they will have significant influence on strategic decision.
My question:
In conclusion, with shareholding of 36%, whether Kawa’s shareholders have significant influence or not ?Thank you.
Clearly with Kawa’s shareholders owning 36% they will have some influence.
However from Kawa’s shareholders point of view, they may be concerned they will not have enough influence.
However Lula’s shareholders may be worried that they will have too much influence.
That is what the answer is trying to say 🙂
So the key word here is significant. And by saying it is significant or not from the viewpoint of each company’s shareholder, I would be awarded for evaluation professional mark?
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