Listed Company Merger Prices to Use Fair Value, Blocking Stock Price Suppression

In future mergers of listed companies, possible “stock price suppression” will be blocked at the source. This is because the method for calculating merger prices will shift from a share-price-centered approach to a “fair value” standard that comprehensively considers asset value, earnings value and other factors. Under the previous approach, market share prices had a major influence on merger pricing, raising concerns that shareholder value could be harmed if prices were kept low before a merger. The new standard focuses on improving fairness by reflecting financial value beyond share prices. As a result, transparency in pricing and shareholder protection are expected to strengthen in listed company mergers. Source: mk.co.kr