GREY:RUTFF - Post by User
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MicroInvestoron Jan 31, 2014 10:13am
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Post# 22157719
Klein Faber Valuation of $0.075 to $0.115/share?????
Klein Faber Valuation of $0.075 to $0.115/share?????Klein Farber provided a valuation to the Buying group prior to their offer. They ultimately concluded that the fair market value of the Common Shares as at October 31, 2013 is in the range of $0.075 and $0.115 per share. This value is for the company when it is private.
Valuation Caveats (from the Directors Circular):
"unrisked cost savings in the range of $520,000 to $650,000 per annum expected to be achieved by the Company ceasing to be a public company…..value represented by the full cost savings, of approximately $0.03 to $0.039 per Common Share” Therefore, the range of the value of the public company is $0.036 to $0.085 per Common Share. The average value is about $0.0605 so the price offered is at the midpoint.
"significant risks to the Company’s operations that may result in actual revenues being materially less than have been estimated"
"not apply any discount to the valuation of the Common Shares to account for, among other things, their relative illiquidity"
Conclusion: The valuation indicates that the value of the common shares of the public company are between $0.036 to $0.085. The offer of $0.061 is at midpoint. If one applies a discount for the illiquid nature of the stock, the offer is reasonable.