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Takeover Premium Formula

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Takeover Premium refers to the amount by which the acquiring company offers to pay for the target company shares above their current market price. Check FAQs
TPM=PT-VT
TPM - Takeover Premium?PT - Price Paid for Target Company?VT - Pre Merger Value of Target Company?

Takeover Premium Example

With values
With units
Only example

Here is how the Takeover Premium equation looks like with Values.

Here is how the Takeover Premium equation looks like with Units.

Here is how the Takeover Premium equation looks like.

5010Edit=10000Edit-4990Edit
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HomeIcon Home » Category Financial » Category Mergers and Acquisitions » fx Takeover Premium

Takeover Premium Solution

Follow our step by step solution on how to calculate Takeover Premium?

FIRST Step Consider the formula
TPM=PT-VT
Next Step Substitute values of Variables
∴ TPM=10000-4990
Next Step Prepare to Evaluate
∴ TPM=10000-4990
LAST Step Evaluate
∴TPM=5010

Takeover Premium Formula Elements

Variables
Takeover Premium
Takeover Premium refers to the amount by which the acquiring company offers to pay for the target company shares above their current market price.
Symbol: TPM
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Takeover PremiumOpen Variable
Price Paid for Target Company
Price Paid for Target Company refers to the total amount of money transferred from the acquiring company to the shareholders of the target company in exchange for their ownership stake.
Symbol: PT
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Price Paid for Target CompanyOpen Variable
Pre Merger Value of Target Company
Pre Merger Value of Target Company refers to its estimated worth or valuation before any merger or acquisition negotiations or discussions take place.
Symbol: VT
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Pre Merger Value of Target CompanyOpen Variable

Other formulas in Mergers and Acquisitions category

​Go Accretion Amount
AA=((PB)⋅(YTMAPPY))-CI
​Go Gain of Acquirer
GAQ=S-(PT-VT)
​Go Post Merger Value of Merged Company
PMV=PVA+VT+S-C
​Go Control Premium
CLP=TPR-MPEP

How to Evaluate Takeover Premium?

Takeover Premium evaluator uses Takeover Premium = Price Paid for Target Company-Pre Merger Value of Target Company to evaluate the Takeover Premium, Takeover Premium is the difference between the market value (or estimated value) of the company and the actual price to acquire it. Takeover Premium is denoted by TPM symbol.

How to evaluate Takeover Premium using this online evaluator? To use this online evaluator for Takeover Premium, enter Price Paid for Target Company (PT) & Pre Merger Value of Target Company (VT) and hit the calculate button.

FAQs on Takeover Premium

What is the formula to find Takeover Premium?
The formula of Takeover Premium is expressed as Takeover Premium = Price Paid for Target Company-Pre Merger Value of Target Company. Here is an example- 5000 = 10000-4990.
How to calculate Takeover Premium?
With Price Paid for Target Company (PT) & Pre Merger Value of Target Company (VT) we can find Takeover Premium using the formula - Takeover Premium = Price Paid for Target Company-Pre Merger Value of Target Company.
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