let's be realistic..., page-27

Tax credits in foreign jurisdictions usually have little value for valuation purposes. From a tax perspective you would think it would be a lot easier for Reddys to just buy the IP directly and then depreciate this in India against Indian income without the complication of international tax laws and the added cost of due dilgence, FIRB, legal and banker fees on takeover methodology etc etc etc.

Further, dont see what value there is in a buyout of Fonda for DRR. in order to make it an attractive proposition they would need to recover at least the cost of capital, with an internal rate of return target hurdle. They take no risk now in the US with a profit share- why spend all that cash and take on that risk unless they can buy the rights for a large discount that at least covers the cost of capital? With a further discount for taking into account the risks of further market participants, entry of other substitute products etc. So whats in it for ACL in this context and why would we agree to sell for a discount unless we are desperate for the cash?

In my mind $100m would be better spent from DRR's perspective on finding the next Fonda and growing the product growth pipeline.