The Team № 2 Cherkasova Elisaveta Federova Svetlana

The Team №2 Cherkasova Elisaveta Federova Svetlana Karachevtseva Irina Luneva Marina Pylnev Ivan Control premiums and discounts for lack of liquidity

Estimation of control value and stock package portion in equity structure Analysis of pricing of large stock packages Analysis of dual-class stocks Analysis of M&A transactions premiums Control premiums Statistical approach Exrert-analitical approach Non-control factros (often stratigical) Upper hurdle Premium for voting right vs Control premium Mergerstat Review Premium = 25% of Equity Equity = EBITDA*mult – Priv. shares – Debt mult = average IC/EBITDA of analogues Rule of Thumb Peer review; game theory

Control premiums Meregerstat Review: Database of premims based on changes in stock prices prior and after deal Factors: The nature and magnitude of Nonaperational assets Discretionary expenses Business opportunities currently unexploited The perceived quality of existing management The ability to integrate the target into acquirer’s business or distribution channels Average and median premiums 1Q07-1Q12

Control premiums Statistical approach Exrert-analitical approach + - Large statistical data sample by time and industry Average market values –frontiers for fair value Non-control factors effects High variance of control premiums Lack of databases at emerging markets including Russia Deep analysis of unique factors affecting control features Not market average values for unique cases Subjective estimation Dependance on maths tools, difficulties with interpretations Focus on one-two main factors neglecting others

Thank you for attention!