The Cost of Control | Lessons from EuroHoldings and Golden Ocean Group
On Friday June 20, EuroHoldings Ltd. (NASDAQ: EHLD) closed at $6.61 per share. The next day, the Pittas family sold 51.04% of their EHLD shares for $12.90 per share.
EHLD’s net asset value (NAV) was estimated at approximately $9.75 per share.
Which begs the question – why did the shipping-savvy, deep-pocketed Latsis family pay a 95% premium to EHLD’s stock price and a 32% premium to its NAV?
Control.
It’s the same reason that CMB.Tech (NYSE: CMBT) willingly paid John Fredriksen $14.49 per share for his 40% stake in Golden Ocean (NASDAQ: GOGL) in March, when the share was trading at $10.06 (implied 44% premium) with NAV estimated at $12.00 per share (26% premium).
In the cases of both EHLD and GOGL, the acquirer took control of the board of directors, and with it, gained the ability to appoint their own management teams and chart the company’s course going forward.
The “control premium” the acquiring companies paid seems arbitrary and expensive when viewed in isolation. However, the numbers start to make sense if you decompose the shares into two categories: (a) controlling shares and (b) remainder of non-controlling shares.
EHLD’s Control Weighted Average Price per Share (June 2025)
51.04% block of controlling shares bought for $12.90 per share + 48.96% of non-controlling shares traded at $6.61 per share = $9.82 per share
Estimated NAV = $9.75 per share
GOGL’s Control Weighted Average Price per Share (March 2025)
40.8% block of controlling shares bought for $14.49 per share + 59.2% of non-controlling shares traded at $10.06 per share = $11.87 per share
Estimated NAV = $12.00 per share
