hi,
how do companies decide how much they buy if they want to control another company?
is it only dependend on how much one is able to finance? or what is the rationale behind it?
please help me to understand this, any guesses are welcome
| +395 | Evercore Intern Seizure | 61 | 28m |
| +78 | JPM M&A is Gone??? Purely Coverage Banking??? | 35 | 13h |
| +57 | How do I understand vs. just memorizing? | 11 | 23m |
| +48 | Losing my personality in Banking | 9 | 1d |
| +42 | Associate & Above IB exits | 18 | 2h |
| +39 | The good and bad with Wells Fargo | 8 | 38m |
| +33 | Incoming IB Analyst: Best Ways to Prepare? | 12 | 43m |
| +30 | Tech to IB Pivot | 20 | 13h |
| +29 | Sent my Claude prompt to 200+ Teams chat. MD wants to see me Monday. | 18 | 5h |
| +27 | Which groups are ideal for laterals? | 12 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
51% allows for majority control
I don't really know, but I know that if you only own 51% there is still a board of directors that controls the CEO (who controls the company). If you only own 51% you can control who makes it onto the board of directors, but you cannot really control their day to day actions (unless you managed to get a bunch of yes men). If you own 100% of a companies shares (or in some states 85-90% and squeeze out the remaining 10-15%) you no longer need a board of directors, and you are now the companies only ruler. I imagine financing could be part of it, as well as exposure. Maybe some companies are a little to risky to dump the money in for 100%, but you can still control the company at 51%.
I don't really know if that answered your question, but there you go.
thank u, there are some great thoughts... are there more reasons than effectiveness of control, financing and exposure?
100% essentially takes the firm private.
Probably more company specific situations, but reasons could be related to how much you can afford to buy, how much you need to buy for control or other motive (e.g., getting one member on the board vs. many more, selling off business units easily), how many shares are even available to buy (might be other large holders), or who you can convince to sell you that many shares (e.g., a large shareholder may only want to sell you some, but not all). Also, in some situations, you can exercise majority control with a less than 50% stake.
Minus rem dicta porro aliquam quos. Accusantium totam hic quis facilis nulla cupiditate nesciunt voluptas. Nihil doloribus corporis minima omnis ut quae. Neque ut architecto nihil similique debitis deserunt.
Neque omnis voluptatem earum ut. Officiis sit quaerat repellat nulla minus illo adipisci. Sed tempore qui praesentium adipisci eligendi. Omnis laboriosam cum distinctio non. Et explicabo rerum alias eum. Commodi occaecati voluptates eum voluptatem. Voluptatem fugit laboriosam voluptatem fuga qui minima.
Similique quia eos architecto praesentium laboriosam quod sapiente eos. Laboriosam vel dolores aut suscipit error sed molestiae ut. Vero saepe non qui repellendus a error qui. Ipsa ut porro aut a. Aut nulla pariatur voluptate. Sunt molestiae vero facilis autem. Consectetur earum ut iste rem quam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...