Paul,
Thanks for the thoughtful response. Some follow up questions:
1. "Assume that the market has properly valued each company."
Depending on whether you subscribe to the efficient market theory,
this could be a big assumption to make. In the case of ASND, I
do not think the market has correctly valued ASND in the past or
currently. So, based on your model would you have to calculate
your own valuation of the company, and use that number?
2. "Finally, assume all of the synergies are assets of the acquired company, and place a valuation on the company based on current market conditions."
So, what about non-synergistic considerations? For instance, Lucent,
LU, may be interested in obtaining ASND in large part to prevent its
competitors from doing the same, and thereby gaining a stranglehold
against its core business.
3. Based on the model that you summarized, is there really anyway
for a typical investor to calculate a valuation, for say ASND,
given that we do not have access to ASND's and a potential acquirer's
synergistic calculations?
Thx,
John Dodson |
