RE: Show me the money19 Jul 2025 11:22
There seems to be a concerted effort to shape acceptance of a “low ball” offer for PRD. And during a weekend to boot! One may wonder why?
Acceptance of such an offer is based on the “fairness” of accepting a multiple of the average price paid by an individual investing in PRD. Justification uses an analysts valuation of selling the company at circa £1-48 per share.
Many years ago, whilst participating in a MBA project, I learnt a valuable lesson about “Valuation of the Firm.”
The task was to establish the fair value of a private manufacturing firm that the entrepreneurial owner was minded to sell, with the approach of his retirement. The project was an opportunity to participate in a real-life situation, rather that analyse past case-study material. Access was given to all the information that the owner had and delivery of the results would be gratis.
Using all the expertise and experience available a consensus range of a fair valuation was achieved. A detailed report was produced and handed to the owner.
About a year later it was learnt that the firm had successfully been privately sold. Enquiry of the now retired entrepreneur revealed that the price received was far in excess of the valuations postulated by us “experts.”
The wisdom gained from the project was succinctly stated by the now very wealthy retired entrepreneur. “The true fair value of a firm is not what the experts tell you it is – it is the value that the purchaser is willing to pay, and seller accept!”
So, at best £1-48 may be a low starting price to tempt interested parties to engage. The fair price will be what the knowledgeable Board of Directors recommend, the shareholders accept, and the purchaser(s) pay!
DYOR I’m only putting the “experts” view into perspective to balance the views of those shaping, and promoting acceptance of a low value for their own reasons.
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