The value of a block of shares cannot always be set equal to the equivalent or pro rata parte value of a 100% interest. The valuation of blocks of shares, and especially that of minority blocks, requires a precise analysis of specific stipulations in shareholders’ agreements and company statutes. This concerns the stipulations regarding say, exit arrangements (‘good leaver and bad leaver’) and possible certification of shares.
The possibly limited say in connection with a block of shares, but also so-called ‘tag-along’ and ‘drag-along’ stipulations, can have important implications for the trade-ability of minority blocks as well as the value thereof. Sman Business Value provides structured insight in those aspects of value.
The valuation of minority blocks always constituted a special field of interest for the founder of Sman Business Value, Mr Ron Sman. Various publications on this subject originate from his hand. We will be glad to send those to you on request.