• Types There are two different types of private benefits of control from company value perspective: Benefits which reduce the value of company and which do not so.

• [1] Protection In order to prevent the impact on the small shareholders from the realization of these benefits of large shareholders, there is usually a mandatory offer policy
  in transaction area for protection of the small shareholders from kinds of value-destroying transactions.

• Private benefits need not come from the firm’s cash flows, however.

 

Works Cited

[‘MJ Barclay and CG Holderness, ‘Private Benefits of Control in Public Corporations’ (1989) 25 Journal of Financial Economics 371, 374. The authors go on to argue these benefits could be measured by differences in stock prices: ” Our block trades are
typically negotiated at arm’s length, and the trading parties presumably forecast rationally the effect of their trade on the stock’s exchange price. Thus, any private benefits will be reflected in the difference between the block-trade price and
the post-announcement exchange price.”
2. MJ Barclay and CG Holderness, ‘Private Benefits of Control in Public Corporations’ (1989) 25 Journal of Financial Economics 371 Photo credit: https://www.flickr.com/photos/nikontino/13539404903/’]