Business case
A minority shareholder received an offer from a third party to acquire its interests in two real estate companies, being a project developer and a construction company. The majority shareholder, which held a right of first refusal, considered the proposed price excessive. It was unwilling to match the offer and also opposed the entry of the third party, which it did not regard as a suitable shareholder.
Shareholder disputes frequently emerge where there are asymmetries in the information available to the parties. Such imbalances can affect perceptions of value, performance, and fairness, and can ultimately intensify areas of disagreement. Adopting a transparent comparison framework, grounded in clear assumptions, can help address these challenges. In this case our analysis allowed the discussions to take place on a more realistic basis for the minority stake buyout.
We assisted the client in evaluating the reasonableness of the offer against the backdrop of a slowing market and a limited project pipeline. Our assessment drew on historical transactions, current trading activity, and the company’s business plan projections.