Control premium

The extra a buyer pays for the right to direct a company, above the price of a minority share.

An acquirer paying ₹1,450 for shares trading at ₹1,150 has paid a 26.1% premium.

The premium is paid for real rights: the ability to change management, to redirect capital, to access the cash flow, and to capture the synergies. The empirical range across markets clusters between 20% and 40%, higher where the target is underperforming and there is more to fix.

In India the takeover regulations force an open offer once a threshold shareholding is crossed, which puts a floor under what minority holders receive and makes the premium partly a matter of rule rather than negotiation.

A premium above 50% needs a synergy case that survives arithmetic.