Originally Posted by
Globaliser
So two areas of question arise:-[list=1]Why does MO'L think that the business is worth more than the institutional investors thought? What is the extra value of the business to him, as opposed to anyone else
For the reason I posted yesterday. We might not expect FR to go head-to-head with EI on its profitable routes in order to squash it, but there will always be that risk, and investors will take that into account in determining the value of EI. The threat of FR competition therefore suppresses the market value of EI. FR ownership of EI removes this risk and so EI is worth more under FR ownership than if owned by anyone else.