Minority Discount for Reduced Powers in Negotiations of Non-Listed Minority Holdings: Evidence from European Countries

摘要

This article aims at giving a contribution to the issue of valuating the minority discount for reduced powers in purchase/sale transactions of non-listed minority interests. Firstly, the meaning of minority discount for reduced powers will be investigated as well as its economic determinants, specifically pointing out that the economic rationale behind this type of minority discount lies in the impossibility for the minority purchaser to gain the prerogatives associated to a controlling position. Then the analysis will focus on the considered examination of the evaluation criteria of minority interests in businesses non-listed on official markets developed by main doctrine, at the same time singling out the salient and peculiar features thereof together with some comments and in-depth studies on the subject-matter. In this respect the main features of both direct and indirect valuation criteria will be analysed, specifically focusing on the second ones which measure the economic value of such minority interests by executing a discount percentage to the pro-rata value of the whole company’s economic capital (W). Finally the methods most often utilised by the European well-qualified professional praxis to measure the value of minority interests non-listed on regulated markets will be investigated. To this purpose, a number of official reports concerning purchase/sale transactions of minority interests in European non-listed companies will be examined. Finally, some conclusions on the topic at stake will be drawn.