Ann: JLG Receives Conditional & Non-Binding Indicative Proposal, page-73

This is a textbook example of how private equity approaches strategic acquisitions, and often with management alignment. The offer only being disclosed after media speculation does raise governance questions around disclosure timing. Interestingly, the proposal includes scrip consideration for key management, including CEO Scott Didier, allowing them to retain equity in the business post acquisition. Whilst this signals alignment with PEP, it also raises questions about how independent the board's recommendation will be.

Blind freddy can see that there would have been discussions on price behind closed doors, especially when scrip is being offered to management. While the public statement remains silent on valuation, the inclusion of equity rollover for CEO Scott Didier and other executives implies that a valuation framework must already exist, even if it's not yet finalized or disclosed. From a governance and market transparency standpoint it’s problematic, especially when the share price has moved significantly on speculation and selective disclosure.

Analyst fair value estimates range from $3.23 to $4.01. Interestingly the market is not pricing in much of a premium. Given the 51% decline in share price over past year, I would speculate that a credible offer would need to be in the $3.50 to $4.00 range to win shareholder support. That said retail shareholders hold just 13.8% and will not be determining the 75% shareholder approval required under the schene of arrangement.