Looking for data on minority interest / illiquidity discounts?!
September 02, 2023
by a searcher from University of Southern California - Marshall School of Business in Santa Monica, CA, USA
Hey all, I made the mortal sin of agreeing to a post-close seller put, which became available to the original seller on the fifth anniversary of my original acquisition. I’m close to exiting the platform, but the original owner has indicated his desire to exercise his out right preemptively.
does anyone have any research / white paper studies on appropriate discounts for selling a minority interest in a privately held business? This would include typical discounts for minority shareholder, illiquidity, etc.
Greatly appreciate any help,
Michael
from University of Massachusetts Amherst in Boston, MA, USA
I would assume there was a price discovery mechanism in the contract of the put but it sounds like there was not.. You are likely looking at a similar multiple (or better) than what you acquired the business at given the sellers knowledge of that multiple and how the business has performed since
from University of Virginia in Charlottesville, VA, USA