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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (2564)	11/30/1997 2:05:00 PM
From: john harris	Read Replies (2) of 78603

<<Total consideration was 63M over "fair value" (what's that mean??) of "net assets". I assume it means bv = fair value of net assets. Does that seem fair to you guys?>> Paul, "fair value of net assets" would not be defined exactly as the "book value" as shown on Papetti's balance sheet just prior to the acquisition. But I believe it would be close enough to be safe for the calculation and comparative general industry evaluation that you are attempting to benchmark. I think one would have to know the magnitude of any assets assessed significantly higher than cost at time of purchase as well as any assets excluded due to FASB restrictions. In other words, get a hold of Papetti's private balance sheet on 12/31/96. :-) For your purposes, you are attempting to compare the "fair market value" of an industry transaction and apply that metric to the "book value" of CALM. Not exactly an apples for apples comparison, yet all-in-all, 4X book sounds like a usable number. All IMHO, of course.

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