[3]: 165 The amount of control is the acquirer's decision and is based on its belief that the target company's share price is not optimized.
An acquirer would not be making a prudent investment decision if a tender offer made is higher than the future benefit of the acquisition.
The control premium and the minority discount could be considered to be the same dollar amount.
Company XYZ has an EBITDA of $1,500,000 and its shares are currently trading at an EV/EBITDA multiple of 5x.
A potential buyer may believe that EBITDA can be improved to $2,000,000 by eliminating the CEO, who would become redundant after the transaction.