infolio

Chapter 8 - The valuation

MRI offered:

$460 million.

Prescott Power’s independent advisers estimated a standalone value between:

$510 million and $590 million,

depending on assumptions.

Ryan argued the lower purchase price reflected:

Debt assumption.

Integration risk.

Required capital expenditure.

Fair argument.

Then Melissa produced a second analysis placing fair value at:

$445 million.

Two valuations can differ honestly.

But Grant noticed something.

Several assumptions in Melissa’s model came from:

Operating forecasts that nobody at Prescott Power remembered providing.

He asked:

“Where did these numbers come from?”

Melissa answered:

“Management materials.”

Which management?

May you like

She would not say clearly.

That started the internal review.

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