It's a takeover. Only, instead of the acquiror paying a premium above and beyond the current stock price, the buyer pays less than whatever the stock is trading at.
Yes, it's a highly unusual situation, but sometimes the public just doesn't reallize how bad the business outlook is for a given company. So they sell at a price below where they're trading. In the modern era, this phenom happened with LinkedIn. The company had been trading at astronomical highs with the public believing it was "the next Facebook." In fact, FB was killing a lot of its growth. So MSFT swooped in with a price far below where the stock had been trading just 6 months earlier, with a kind of "takeunder," as LinkedIn management realized that their future was bleak. Under the auspices of Microsoft, however, LinkedIn had a chance of remaining vital to the businessworld...a place it stands today.
So that takeunder was probably the least-bad situation. Had LinkedIn not taken the bid from MSFT, it's likely it would have all but evaporated as a stand-alone company today.
Related or Semi-related Video
Finance: What is Control Value?15 Views
Finance allah shmoop what is control value dance on a
fifty shades thing Well there's a partnership a semi evil
one there was once a tv siri's It was exorbitantly
expensive to produce but everyone wanted to make it So
it ended up being made not by one studio but
by three viacom paramount disney and then news corp fox
Before it was disney news corp fox well each of
the three partners put in a third of the money
and split all the money distributions equally The problem on
the show ended up being hugely successful when it ran
for the first time on network tv so that was
great but now it's in reruns and because all three
competitors generally hate each other he's financially if their job
too none are willing to run the show a lot
on their cable network or broadcast network because then they
generate revenues for their hated competitors so they don't run
the tv series even though people want to see it
And this is a big fat bummer to the actors
writers and producers of the show who were banking on
rerun royalties to pay for their divorces if one of
the studios owned the siri's I'ii controlled it let's call
that siri's sunlight ing well then the siri's would heir
a ton more and presumably generate a ton more desperately
needed revenues What do you think divorce lawyers work for
free Well the control value of owning that asset then
is huge because if it were owned by one player
well then that player could run it again and again
and again and again on their network like think big
bang on tbs and then monetize that asset and massively
so there's Incremental control value with the well controlling a
property And yet it's not to be confused with remote
control value which is about a buck twenty five on 00:01:51.209 --> [endTime] ebay
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