kaal:claim:3017612-025

Drag-along rights raise the price the majority can obtain because a buyer facing the prospect of continuing with remaining minority shareholders would otherwise discount its offer for the majority stake.

Source quote, verbatim

Drag-along rights allow majority shareholders to maximize the chance of receiving full value for their shares because the prospect of having to work with the remaining minority shareholders may lead an interested party to offer a discounted price for the majority stake.

From

Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017), III.2 Shareholders' Agreements on the (Limitation for the) Transfer of Shares, p. 12
https://ssrn.com/abstract=3017612 · source PDF

Cite as

Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

Holds when

sale of a majority stake in a closely held corporation

Classification

mechanismsupport: arguedinstitutional-design

Verify

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Attestation record: colloquium/attestations/ca5eaf2afeb5806d...json
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