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Non-Tech : Berkeley Technology Limited (BLKYY) -- Ignore unavailable to you. Want to Upgrade?

To: Ben Wa who wrote (259)	4/16/2000 7:02:00 PM
From: J. Conley	Read Replies (1) \| Respond to of 955

Probably the best source of information for the non-VC businesses is in the latest FBR report. It is linked in a prior post. Apparently, FBR is giving a BV for the non-VC businesses: 3.58 (Life and annuities) + 1.25 (SAI & MM)+ .47 (cash)= 5.29 On the valuation of insurance, FBR sets forth other insurance companies that are valued on average a 2.2 multiple to BV. So, 2.2 times 3.58 = 7.88. FBR gives LDP a 2.5 multiple because they believe the management and internet strategy warrants a higher multiple. If you give the insurance the 2.2 multiple per FBR, and add BV of money management and cash you get a total of: 7.88 + 1.25 + .47 = 9.60. Of course, this is for exercise only, for FBR gives a multiple to BV on the financial services also since it is growing and the prospects look good. The sales revenue from just the insurance and annuities for the last three years was: 1997 $157MM 1998 $204 1999 $322 2000 est. is for $500MM I believe LDP's public portfolio is now worth about 240MM, or 3.73/share. This is about 120MM less than it was when the FBR report was issued. To be conservative, you could back out the 120MM amount from the calculation though I am not entirely clear this is how FBR achieved their numbers. The private equity currently invested is about 180MM, or 2.80/share (including 4.6 million shares of NUFO @$3.25, set to go public in early May.....of course, only if market conditions are favorable). I think it still reasonable to give some multiple, however conservative, on the private equity even amidst all the present doom and gloom. Obviously, there are differing ways to look at the company, but sum of the parts is the way FBR used and I believe that methodology is the proper one. Of course, everyone do your own DD. Of course, the per share numbers are assuming the company has not sold any of their public holdings and not bought back any company stock, either of which they could be doing, or may do in the near future. Another way to look at the company is overall market cap. Add up the public and private equity, add cash, and see what's left; that's what you are paying for the rest of the company. If I made a mistake, someone please correct me. For those of you that can not access the report, the following is an excerpt: >>>>If independent, the annuity and insurance operations carry a book value of approximately $3.58 per share. Given the strong asset management and annuity operations growth, and the multiples of London Pacific's peers, we believe it should trade at approximately 2.5 times its book value, or $8.94 per share. In addition, the money management operations at Berkeley Capital and the financial advisory services at SAI are estimated to be worth $1.25 per share in total. Growth is accelerating in this unit, and furthermore, London Pacific recently announced plans to expand services, including over the web. As London Pacific has demonstrated effective application of new technologies in its existing operations and is closely involved with the technology community, we believe it will develop an innovative and productive web platform. Based on the growth potential in this group, we believe a five times multiple is appropriate. Finally the parent company, London Pacific Group, is estimated to have cash and cash equivalents of $30 million or $0.47 per share. Adding these parts up, we believe the company's annuity and other operations would be worth an estimated $5.29 per share. Assigning the multiples, however, yields what we believe is an appropriate 12-month target market value of $15.66 per share for the financial services operations.<<<<