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Kerrin's premium

KKira4y ago
Good evening, Sir When the question states ''Recent mergers have attracted an acquisition premium of around 25%–30%'', the answer revealed the premium is 30% instead of 25% in share for share offer. May I know why is 30% premium chosen? Is it because Danton Co’s directors indicated their shareholders would be expecting a premium towards the higher end of this scale for a share-for-share offer? Kindly explain it so that I can understand well. I would appreciate if Sir is willing to allocate your time on answering this question. Thanks and stay safe.
John MoffatJohn MoffatTutor4y ago#1
Yes - the reason you give is the reason (that the shareholders would be expecting a premium towards to higher end of the scale).
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