In this long-form post published on LinkedIn Pulse and titled “Tender Offers & Control Premiums”, Ran Dimant of Katzenell Dimant discusses the “tender offer” as a takeover bid mechanism, in theory and practice.
I had the pleasure of working with Ran and providing Editorial Services for this piece.
Ran Dimant is a Founding Partner of Katzenell Dimant and provides strategic and practical legal advice to public and private companies, equity crowdfunding platforms, startups, founders, investors and various business initiatives.
From Tender Offers & Control Premiums:
“This week saw a public takeover bid for one of the few TASE companies that does not have a controlling shareholder, which happened to involve one of our clients. The takeover bid was carried out through a “tender offer”, the mechanism designed to prevent a situation where control of a public company is acquired without sharing the financial value of control with the other shareholders.
When a takeover is being attempted, the bidding party will generally offer existing shareholders a higher price per share than the going price on the stock exchange, accounting for the financial value that is inherit to control. The “control premium” is the excess price the controlling shareholder is willing to pay for the shares conferring control, reflecting the financial value of the benefits the controlling shareholder expects to gain from controlling the company.”
Link to the full post