Just came across the Cameron Partners website . The part that caught my attention was the news section with a series of presentations. The most recent is Food Industry Acquisitions Set to Continue, by Hugh Cotterill – November 2007 (pdf).
While Premia in New Zealand Takeover & Offer Proposals, by Paul Dougherty and Stephen Kaiser – October 2007 (pdf) states the median premium for control (think take over premium, or the extra price paid when someone looks to acquire a listed company) in New Zealand (whether successful or unsuccessful) is 23.6%.
Which leads nicely to another article titled Boards Should Act on Control Premiums, NBR 28 April 2006 , by Paul Dougherty (pdf). This explains the premium for control exists if someone thinks they can extract more value from the set of assets owned by the company with the current business plan and/or management team .
The two main sources of this extra value are stand-alone improvements (cost cutting, growing existing revenue, new products, asset sales or new technology) or synergies (typically cost savings from combining the business with another entity).
The business can have a different value to the purchaser with access to these gains than the existing shareholders with the current management team and business plan.
The article goes on to say a number of advisers suggest there is only one true or “fair” value for a company. While value is in fact different for different owners, depending on the improvements or synergies they can achieve.