fonda for sale?

I have been pondering the future of ACL and wonder what will happen in 2012. I can't seem to get my head around the value of ACL Fonda if there is a demerger.

Mattkid76 posted, when the demerger was initially announced, where do I sign up? [hope I haven't misquoted you Mattkid]. And then he provide us with various earnings projections and valuations on Fonda.

Most of our posts in recent weeks have focused on the CR and the SPP and not so much on 2012 post the CR.

Putting ACL Oncology to one side, it seems to me that PS and the board and investors want to divest ACL of fonda at a price that rewards all. It is possible that they would rather sell the fonda business sooner rather than later and not have to move to a costly demerger.

IMO the only logical buyer is DRR. ACL can't sell to GSK because ACL is in a commercial manufacture/sale agreement with DRS worldwide.

The tenor of ACL announcements has suggested return of earnings of fonda by distributions or other capital distribution. It is possible that ACL could simply sell the fonda business to DRR at a price that enables a capital distribution. And then no demerger.

So what is ACL fonda worth?

If we calculate potential fonda earnings at 30 % of market split between ACL and DRR the best case scenario on North America earnings of $340m is .18c per share pa over say 7 years is $1.18. That increases to .29c per share on Global sales of $540m which equates to $2.06 per share over 7 years.

IF DRR is considering putting in a price for the fonda part of ACCL's business, it is likely to be a low ball pitch and they have certainly have seemed to be acting in a manner that seems to be supressing the fonda market penetration. [scale up and packaging]

So lets just assume a Global earning of $540m at 30% penetration spilt between ACL and DDR. ACL should earn $81m pa.

So what price would ACL accept and what price would DRRs offer?

Just my thoughts and interested to hear others viewpoints on this.

My calculations only and happy to be corrected. Just trying to forward guess.

Cheers

Mulac1