Several studies have found that owners of private
companies normally sell their shares at a 20 to 30
percent discount during mergers and acquisitions. The
private firm discount is one reason the stock market
reacts more favorably to a private acquisition than to
one whose target is a publicly listed firm. What matters
most for sellers of private firms is to understand the
drivers of the “private firm discount” in order to
capture a fair share of the value to be created by the
acquisition.
