ST Posted April 23, 2020 Posted April 23, 2020 I was associated with a 100% ESOP company that was sold for 200% of its recent third party evaluation. Is that premium a red-flag that the third party evaluation was unrealistically low? I ask as I was a 30-year employee that retire just a moment too soon and missed the buyout price. Should i look deeper into the whole process or just accept it as horrible timing? Were are talking serious money here.
Degrand Posted April 23, 2020 Posted April 23, 2020 It is common for ESOP companies to sell their stock for a premium. Otherwise, why would they sell if they could have obtained the same value being offered. So an ESOP obtaining a premium is almost a requirement for it to sell.
ST Posted April 24, 2020 Author Posted April 24, 2020 I understand that there would be a premium paid. Just wondering if 200% would be considered unusual to the point that maybe previous payouts were unfairly low.
Griswold Posted April 24, 2020 Posted April 24, 2020 Could be a synergistic premium which wouldn't have been taken into account by the valuation. I know it's a bitter pill to swallow, but I don't see what further digging would get you.
ESOP Guy Posted April 24, 2020 Posted April 24, 2020 It isn't uncommon. There are a lot of reasons for that kind of premium.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now