Is there any theoretical research that affirms that the inverse of a control premium is an implied minority discount — or is this simply accepted in the business valuations profession?
The minority discount is widely perceived of as the inverse of the control premium, where as an acquirer would assumingly pay a higher price for control in a company and pay a lesser amount for a minority stake. An alternative theory used by appraisers and other professionals, was that the control premiums that were observed in the public markets tended to be paid by strategic buyers, or buyers that had the ability to derive synergies from combinations or had other, specific, strategic intent. There is another large category of buyers of companies, the financial buyer. Financial buyers may not have the ability to derive synergies from an acquisition, but they can seek financial returns from their investments.
