4 Comments

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.

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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...

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

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

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