Eli Lilly & Co. just announced that they are going to buy Sigilon Therapeutics for $14.92 per share. Why are they buying it for a much higher share price than through the stock exchange where the closed quote was $3.93 per share?
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Buying a company like that usually requires the stock holders to vote yes to sell.
So the buying company pays a premium to entice the shareholders to vote yes.
While every share usually has a vote usually the board of directors and other institutions have a large percent of the votes so you need to appeal to those people the most.
Offering a large amount over the current price is a good way to entice people to vote yes to sell the company.
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