Reminder11 Feb 2020 07:07
Copy and paste once again for all the new lurkers on this board, since without a doubt NMC has attracted a massive amount of interest internationally from big players and smaller PIs. Thank you 'alwayswrong' for the original post.
The usual method for determining the offer price is based on a multiple of net earnings..
NMC are projecting annual earnings of £230 million for 2019..
1. If the NMC is categorised as being a company in decline ( a dog ) in other words their hospital contracts are be being wound down over say a 10 year period then an earnings multiple of between 6 and 8 times would be a fair offer...i.e. between £1.4 to £1.8 BN
£7.00 to £8.70 per share..
2..If the NMC were to maintain their existing hospitals in perpetuity, but not acquire any new hospitals ( cash cow ) then an earnings multiple of between 10 and 12 would represent a fair offer..
I.e. between £2.3 to £2.8 BN.. or £11.00 to £13.50
3..If , however , the NMC was still deemed to be a growth company ..I e. acquiring new hospital contracts ( rising star )then a minimum earnings multiple would be around 15 with a maximum of up to 35, depending on the planned levels of growth ..
This would make a fair sale price to be in the region of
£3.5 to £8 BN. or ....£17 to maybe up to £40 per share.
It follows therefore that all other things remaining equal , then unless the NMC is in decline and winding down,. the offer price of £2 billion being mentioned is a derisory one.
My understanding is that the NMC is still a growth company ...?? For information the share price earnings multiple ( PE ratio ) over the past 5 years has ranged been between 14 and 36...
I said all other things remaining equal because we have the overhang of the Muddy Waters report.. ‘