Originally posted by madamswer
"Its a low ball offer opportunistic in this environment.
Little bit of exchange rate calc to, but it should be more like $8 au."
The bid price equates to valuation multiples of ~25x P/E, 15x EV/EBITDA and <4% Free Cash Flow yield.
Not sure what is so low-ball about that.
Looks to me like a pretty fair and reasonable offer.
At your indicative level of "$8 au", the valuation multiples become 33x P/E, 20X EV/EBITDA and 2.8% FCF yield.
Which, frankly, are nonsense levels, even for a business like this which is well-managed and enjoys somewhat of a privileged market position.
Fair as in reprents fair value? Or fair as in fair to the current shareholders of the business by providing a sufficient premium over the fair value of the business?
Given the quality if the business and management have spent a number of years investig heavily for the future i feel as though we were just about to reap the rewards of this investment.
My initial assessment is that i would rather hold onto my shares however this is somewhat tempered on a relative valuation basis given the market may have presented a number of other opportunities given recent volatility.
