By Bill Anderson, FCCA, Chief Executive Officer, Assetica — 2026-07-18
When one partner buys out another, the whole deal turns on one number, and the two sides want it to move in opposite directions. How a buyout stake is actually valued, why minority and control stakes are worth different amounts per share, the discounts that apply to a departing shareholder, and why an independent valuation is what lets a buyout close instead of ending in a dispute.
Before any method is chosen, the governing document usually decides the rules. A well-drafted shareholders agreement, or a mainland memorandum of association, often specifies how a departing partner's shares are valued: the standard of value, whether minority discounts apply, who appoints the valuer, sometimes a formula or pre-agreed multiple. Where those terms exist they govern, and the valuer works within them. Where they are silent, the parties fall back on a fair value assessment, which is where disputes begin.
The common error is to value the whole company and multiply by the percentage. A 30 percent stake in an AED 10 million company is not automatically worth AED 3 million. If it cannot control decisions, appoint directors or force a dividend or sale, a buyer acquires limited power and the market prices that. A minority interest commonly attracts a discount for lack of control and a discount for lack of marketability; a controlling stake may carry a control premium.
Underneath the stake, the company is valued by the income approach (DCF), the market approach using comparable multiples, and an asset-based floor, reconciled into a range. Earnings are normalised first, which matters more than usual in a buyout because a departing partner may have drawn an above-market salary or the remaining partner may argue the business depends on them personally. Stripping out owner-specific and one-off items to reach maintainable profit is what both sides negotiate around.
Buyer and seller sit on opposite sides of the same number, and a valuation from either side's accountant is dismissed by the other before it is read. An independent valuation serves neither party, and that impartiality is what gives it authority: it can be accepted as a joint expert opinion, settle a stalled negotiation, or stand as evidence if the matter reaches the DIFC or ADGM courts. Independence from audit and deal-broking conflicts is the trait that matters most.
How do you value a partner's share in a buyout?
First the whole company is valued on a defensible basis, then the specific stake is valued, which is not simply the company value times the percentage. A minority stake usually attracts discounts for lack of control and lack of marketability; a controlling stake may attract a premium. Where a shareholders agreement sets the mechanism, that governs.
Is a 25 percent stake worth 25 percent of the company?
Usually not. A 25 percent stake that cannot control the company is worth less per share than a controlling stake, because a buyer is acquiring limited power over decisions, dividends and any future sale. Discounts for lack of control and lack of marketability reduce the value below a straight pro-rata share.
What if the shareholders agreement sets a valuation method?
Then it governs. A well-drafted agreement or memorandum of association often specifies the standard of value, whether minority discounts apply, and who appoints the valuer. The valuer works within those terms. Where the document is silent, the parties fall back on a fair value assessment, which is where most buyout disputes arise.
Why use an independent valuer instead of our own accountant?
Because the buyer and seller are on opposite sides of the same number, and either side's own accountant is dismissed by the other. An independent valuation serves neither party, which is what gives it the authority to settle the negotiation, act as a joint expert opinion, or stand as evidence if the matter reaches the courts.
How long does a buyout valuation take?
Typically five to seven business days from receiving the accounts, shareholding details and the shareholders agreement, with expedited delivery available where a deal is moving quickly.