Forum Archive Index - November 2001

["Phil Boeyen" <pboeyen@sharechat.co.nz>]

Like most of you I have been watching the current takeover bids and
valuation discussions for CEN, FRU and PRG with interest, particularly in
terms of independent appraisal valuations.  While there are a number of
financial formulas for calculating what a company is *worth*, these can't
fully take into account how badly a company wants the takeover business.  I
think Lion's recent offer for Petaluma is a a great example of this - or
alternately, Allied's bid for Montana.

How much does EME want Contact?  As has been pointed out, I think they want
the cashflow quite a lot and given the current demand for dividend stocks
their timing for a takeover appears to be floundering. How much does Danone
want Frucor?  That's much trickier, but as it is the largest beverage
company in both China and Indonesia, it stands to make a lot more money from
Frucor than it will pay for it.

A takeover reminds me of a poker game where no-one wants to give too much
away. Sometimes companies place a big takeover bet early on and everyone
folds, other times they increase their bet incrementally.  It will be an
interesting next few weeks.

Phil
(hold fru)


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