Cheap trick

It’s a commonly held view that investors need to be offered a premium to part with their shares in a takeover. So why would anyone offer a discount, as Macquarie has done with the London Stock Exchange? It’s probably because there is no point paying a premium when the target’s shares are already overvalued. That is a quick way to destroy value. True, it is a waste of time bidding low if there is a rival prepared to pay substantially more. But sometimes the target’s shares rise in anticipation ...