4 Comments
author

Generally, I agree with you, however in this case - I think EV is misleading because they have most of their assets in PP&E - which is certainly worth something in a squeeze-out, but wouldn't be included in their EV.

Expand full comment

Sorry, but EV because it incl. financial debt. If you compare SHW and Pankl you cannot take EBITDA and compare it to their market cap. EBITDA is a proxy for unlevered cash flow and thus need to be compared to market cap+fin.debt. What if SHW has EUR 1bil in fin.debt, would you still say it's cheap if it's market cap is 1*EBITDA. Obviously not...

Expand full comment
author

I understand your point. I am just saying that in a squeeze-out the most probable and useful metrics would be book value.

Expand full comment

If you talk EBITDA, you should compare it to EV, not MarketCap.

Expand full comment