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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Kerrin’s premium
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.
Yes – the reason you give is the reason (that the shareholders would be expecting a premium towards to higher end of the scale).