Ann: 2021 Results - a transformational year for Neuren, page-49

goldenchook: Thanks for pointing out to people a T/O price has little to do with the current share prices. This seems to be a common misconception.

Using current share price to work out a takeover price is back-to-front logic. Except in stressed situations, anyone doing a takeover (or considering being taken over) will look at the company's intrinsic worth. DCF is a common method
and there are others - but none of them look at the current share price, which is irrelevant.\

The average 'takeover premium' for biotechs ma have historically been 100% (or some other number). All this tells you is the average biotech traded at a 50% discount to real value before a takeover. The actual discount could be absolutely
anything (the share price may even be higher than the intrinsic value - plenty of meme stocks in this category).

To follow the logic being espoused by many here if a T/O offer today of $8 is reasonable (because share price is $4) then if someone drops a big sale onto the market at $3 the next day, then the T/O offer should now be $6. Or if takeover
value of the company is $8 today, when share price moves to $6 it should now be $12?

None of this makes any sense.

We should expect the takeover price of a non-distressed company to be based upon its intrinsic worth - which is not related to the current share price.