control premium

Definition

The amount an investor will pay to acquire control of a company, typically an amount higher than the current market value of the company. An investor seeking to acquire control of a company is highly motivated, and is typically willing to pay more; this often is comes into play when one company is trying to acquire another, and is trying to convince the second company to agree to the deal. The amount above the market price that the investor offers for the shares is known as the control premium.

Use control premium in a sentence

You should try and make sure that you know how much the control premium will be and get the most from it.

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I wondered what the control premium was because it was important for our business and how people treated each other.

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Jennifer's control premium was so high, it caused even the more stoic shareholders at Markridge to respectfully applaud her gumption.

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