Person A owns 51% of the shares of a company. Person B owns 49% and is willing to pay literally any amount of money to buy enough stock to become the majority shareholder. Person A is not willing to sell no matter what. How is the price of the stock determined?

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Person A owns 51% of the shares of a company. Person B owns 49% and is willing to pay literally any amount of money to buy enough stock to become the majority shareholder. Person A is not willing to sell no matter what. How is the price of the stock determined?

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Anonymous 0 Comments

On many cases such as you describe, there is a way in the company bylaws to resolve this. An example is the “double ended shotgun”. Person A offers $100/share. Person B can accept that offer (A pays B and A then owns all the shares) OR they can choose to instead reverse the buyout and choose to buy A’s shares at the price A offered (so B end up with all the shares). This approach forces A to offer a fair price, even overpaying so that B doesn’t switch around the shotgun.

Most companies that start off with this sort of ownership structure will have these sorts of bylaws. If not, there’s no way to resolve it.

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