I dont disagree with your analysis other than to say paying a higher premium makes it a lot harder for the acquirer to get the necessary support from their shareholders. Perceptions matter and the acquiring company would need to convince their shareholders and analysts that they havent overpaid and that the deal is a good one. Certainly no matter how much the DCF stands up, there would be shareholders pushing back against a large premium. So in my view, the current share price matters a lot. Selling a 100% premium vs a 600% premium to their shareholders would be vastly different in my view. Of course if the company is private then it doesnt matter as much.
The Whens and Whys of Top Biotech M&A Deals, page-32
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