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Masterminding the Deal by Roger Mills, Peter Clark

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APPENDIX A

Acquisition purchase premium-related issues

RELATED CHAPTERS AND PARTS:

1.4   Merger wave issue I: (T)APP-synergy divergence

3.6   Value gap (VG): do synergies offset the price necessary to pay?

7.1   Value gap revisited: the integrated synergy-bid approach

Acquisition Purchase Premium (APP) is calculated based on the difference between the accepted purchase bid price for the acquiree versus that target’s share price days prior to the first prospective acquirer’s explicit expression of possible purchase interest.1

APP is often expressed as a percentage, to help assist in determining whether or not overpayment has occurred (Andrade et al, 2001; Azofra et al, 2007).2 In a related application, the APP financial amount serves as the ...

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