Isn it true that tracking stocks preclude a “takeover premium” within their stock value?
While tracking stocks do not preclude a company from being taken over, it is true that the entire company, versus an individual tracking stock group, would need to be the target of the takeover. Thus, an unsolicited or “hostile” acquirer would have to “bite off” more than just a Group. However, tracking stocks do not preclude the Company selling one group to an outside purchaser. Applera’s management believes that the value of any premium that might theoretically be associated with a hostile takeover of an individual Group (if it were a stand-alone company) is relatively minor compared to the benefits of its tracking stock structure, and that it would be a disservice to its shareholders to manage the company based on very indefinite and uncertain chances of a takeover. Hostile takeovers are relatively rare in the high technology arena where much of a company’s value may reside in its people – an asset that can walk out the door following a hostile takeover. Back to Top8.
