Safarvik Travel has a Rs 300 crore acquisition offer. Drag-along needs 60% of the preferred plus a majority of the founders. Series A holds 25% with a Rs 40 crore 1x preference, Series B 30% with Rs 160 crore, and two founders hold 25% and 20%. Who can block, and what does each party receive?

Series B takes its Rs 160 crore preference, Series A converts for Rs 50 crore, and the founders share Rs 90 crore. Neither preferred series can drag alone: 60% of 55 crore preferred shares is 33 crore, and B holds 30, A 25. Either series can block, and so can Founder 1, whose 25 crore shares are a majority of the founders' 45. Founder 2 cannot block.

In a housing society, a redevelopment deal often needs a set share of the flat owners to agree before the builder can proceed, and then everyone must go along. A drag-alongA clause that forces all shareholders to sell on the same terms once holders above set thresholds approve a sale. works the same way: once the named thresholds are met, minority holders are dragged into the sale; until they are met, any holder big enough to stop the threshold being reached can block. So the first step is to find who sits on the right side of each threshold.

Preferred shares total 55 crore, so the 60% test needs 33 crore. Series B has 30 crore and Series A 25 crore, so neither clears 33 alone, which means each can block by voting no. The founder test needs more than half of 45 crore shares, more than 22.5 crore. Founder 1's 25 crore is a majority on its own, so Founder 1 can block; Founder 2's 20 crore is not, so Founder 2 cannot. The sale needs both preferred series and Founder 1 in favour.

Each preferred series chooses the better of its preference or converting to common. Series B converting would get 30% of Rs 300 crore, Rs 90 crore, against a Rs 160 crore preference, so it takes the preference. That leaves Rs 140 crore. If Series A converts it shares that with the founders on 70 crore shares, and its 25 crore get Rs 50 crore, more than its Rs 40 crore preference, so it converts. Founder 1 receives Rs 50 crore and Founder 2 Rs 40 crore. The four amounts add to Rs 300 crore.

Look at what each party earns on its money. Series A gets Rs 50 crore on Rs 40 crore, 1.25x. The founders get Rs 90 crore. Series B only gets its Rs 160 crore back, 1.0x, so it is the holder with the strongest reason to say no and wait for a bigger offer. Series B would only prefer converting above Rs 533 crore, where 30% of the price exceeds its preference. The founders face the opposite risk: at Rs 200 crore both preferences absorb the whole price and they receive nothing, so they want this deal more than a lower one later.

The deal needs three yeses, and Series B's is the hardest to get because it only breaks even. A common fix is to move value to the blocker without changing the price: for example, the founders and Series A each give up a small slice so Series B clears 1.0x. Before that, test whether a higher bid exists, because Series B's best argument is that Rs 300 crore undervalues the company. The limit of this analysis is that it ignores escrow, earn-outs and tax, all of which change what each party really takes home and are often where the final compromise is made.