Purchase Premium

Purchase Premium defined:┬áIn an acquisition, the purchase premium is the amount paid per-share of a public company being acquired or taken-private that is over the amount the stock had been trading at on the public markets before the announcement of the acquisition. For example, if an acquisition of XY Corp. is announced at $24 a share and it had previously been trading at $20 a share, the purchase premium is 20%. (See also definition of “Pre-Rumor Premium”)

Above is a definition for “Purchase Premium” from PrivCo’s Private Company Knowledge Bank, the definitive online and e-book guide to private companies and private company deals.

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