Point in time assessment
The related inherent challenge is share price volatility between signing of the deal, the expert’s report publication and control passing.
The comparison in a control transaction is the market value of bidder scrip against a fixed estimated value for the target, a point in time assessment. This fails to recognise that most long term investors’ interests are not determined based on the share price at a point in time or even the short period between signing and implementation.
The approach to fairness adopted by experts needs to be able to take into account:Longer time horizons for assessing the consideration, in recognition of potential short-term volatility.The extent of potential correlation between the bidder’s and target’s share price movements (especially for those in the same industry), which is not fully accounted for by comparing a bidder’s share price to a target’s fundamental value.Certain trading pressure that may apply to a bidders’ share price between announcement and implementation, including through the activities of things like arbitrage funds.
https://www.herbertsmithfreehills.com/insights/2024-01/not-fair-but-reasonable-experts-opinion-in-scrip-mergers-and-acquisitions
LRS General Discussion, page-19288
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19.8¢ |
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Mkt cap ! $567.2M |
Open | High | Low | Value | Volume |
19.5¢ | 20.5¢ | 19.5¢ | $3.224M | 16.13M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
24 | 1552874 | 19.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
20.0¢ | 2012927 | 12 |
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No. | Vol. | Price($) |
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24 | 1574338 | 0.195 |
23 | 4609857 | 0.190 |
12 | 1828445 | 0.185 |
15 | 2087252 | 0.180 |
8 | 1509602 | 0.175 |
Price($) | Vol. | No. |
---|---|---|
0.200 | 1482828 | 7 |
0.205 | 7377353 | 48 |
0.210 | 7081049 | 39 |
0.215 | 3108786 | 26 |
0.220 | 2054137 | 35 |
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