M&A Query

tvr

Funny one, need some help.

If a company has a market capitalisation of say €1.5 billion but turnover in 2007 of €1.9 billion and profit of say €230 million. I think the current p/e is around 8.

In this case is a fair takeover price of around €2.1 billion ie.. 40% premium a fair price or how would you work out a takeover figure?

I presume their is no magical formula, is it just a dog fight in negotiations etc..

AccessQuery

Hi,
You state T/O and Profit in '07 as €1.9b and €230m respectively. How did this come about? Was it strong trading activity or were assets sold?

How big is the buyers war chest? Will the vendor be paying cash, equity or a mix of both? Who's actually going to finance the deal?

Where are the vendors based?

Is it hostile or a friendly takeover? Is it a public or private entity? Does buyer have any stake in the takeover target?

Leaving the issue of finances aside for a moment. What synergies are there between the two entities? How easily could they be merged?

What potential savings could be achieved by consolidating Logistics, warehousing, sales, IT, buying power etc etc etc? What cash could be raised by selling off (exiting leases on) duplicated business locations? Are there any units of either business surplus too requirements that could be sold off?

What would potential redundancy/pension packages cost the buyer or will the vendor fund these?

What might the local competition authority or EU have to say about the deal?

There are quite a number of questions to answer before you could even come up with an initial offer.

I'd be happy to help for a small fee!!!

tvr

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