forum comment on asf interesting. thoughts?, page-11

TTH - can't say categorically whether the Expert's Report will include cash balances subsequent to balance date for either party.

However, what the expert will seek to do will be to arrive at value for each of PLT and FER shares. Given the circumstances, they should use a very similar methodology for each of these valuations. I would expect them to most likely use a DCF valuation, but to potentially overlay any concerns around cash balances and ability to deliver on forecasts over the DCF valuation approach.

The most interesting aspect of the valuation will possibly be the forecasts used for the purposes of the DCF valuation. The IER will be quite risk averse in valuing both PLT and FER in current circumstances. . . . they have gone for a Big Name expert who is going to be very concerned about doing a public report at the small end of the market & potential ramifications (really just from a brand perspective) if things go wrong in coming months.

Therefore, I think that you can expect to see very detailed commentary on any hidden issues in either the pLT or FER businesses. FOR EXAMPLE - Decan has pointed to what he believes to be clear evidence that PLT has changed its policy on shipping product before payment is received. IF this is actually an issue at PLT and they have an emerging Bad Debts problem. . . . then I think that you will be alerted to this in the Independent Expert Report.

I think that the expert will also have been very focussed on the certainty of near term cashflow forecasting. To the extent that PLT's near term order flow is / is not watertight, locked down, in the bag. . . . then I think that you will get a good guide from the expert.

The document will be of greatest value to all shareholders if both PLT and FER have provided the expert with full access to information. This is not guaranteed. FER is essentially obliged to lift the skirt as they are the one commissioning the report. If the deal were hostile, PLT would not do this and the expert would be required to rely simply on info that is on the public record.

However, as this was marketed as an agreed deal with both parties doing full DD on the other, I would expect that the expert has had access to full info.

For the new week I have changed my sentiment back to "None". I am in a good and even tempered mood.