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It's probably more accurate to say "desireable" instead of "profitable" here. The decision maker at the acquirer has to believe that there is some profit in it
by vikramkr 7y ago
It's probably more accurate to say "desireable" instead of "profitable" here. The decision maker at the acquirer has to believe that there is some profit in it from them, but that doesn't necessarily have much to do with profitability of either side of the transaction, it could just mean a bigger bonus, or shutting out a competitor, or so on.
- tptacek 7y agoIsn't evaluating prices in terms of "desirability" tautological?
- nine_k 7y agoI don't think so. A profitable company can continue without being acquired. A merely "desirable" but unprofitable may not have this luxury for long enough for another acquisition deal to crop up.
- vikramkr 7y agoWe are discussing the moment of acquisition though in terms of who gets the best deal. A desireablencompany could also raise capital