à très forte décote sur les ratios d'acquisition

English translation: at a big discount to the acquisition multiples for YYY

14:17 Sep 22, 2008
French to English translations [PRO]
Bus/Financial - Investment / Securities
French term or phrase: à très forte décote sur les ratios d'acquisition
I'm somewhat stumped by this phrase, found in an investment fund commentary:

"L'offre de XXX sur YYY prouve l'intérêt stratégique du platine pour les mineurs diversifiés. L'autre cible du secteur est ZZZ qui se traite ***à très forte décote sur les ratios d'acquisition*** de YYY."

I don't really understand what this is saying... ZZZ's shares are trading at a very heavy discount...????

Thanks in anticipation!
Rob Grayson
United Kingdom
Local time: 16:43
English translation:at a big discount to the acquisition multiples for YYY
Explanation:
The 'multiples' are the ratios of the XXX's offer price on YYY to YYY's revenue, earnings, whatever (you don't need to know in order to translate this bit).
So, if XXX is offering 2x annual sales for YYY, when ZZZ is trading at just 1.5x, then XXX is offering a big premium for YYY based on where ZZZ is trading, and ZZZ is trading at a big discount to what XXX is offering for YYY.
Selected response from:

rkillings
United States
Local time: 09:43
Grading comment
Thanks, Bob, for explaining this so clearly - I kind of had the idea but couldn't find a clear way to express it. Thanks also to Bourth and Matthew for your help.
4 KudoZ points were awarded for this answer



Summary of answers provided
4 +1at a big discount to the acquisition multiples for YYY
rkillings
4Yes
Bourth (X)
1ZZZ is being traded based on the acquisition ratios of YYY at way below par rating
MatthewLaSon


Discussion entries: 2





  

Answers


2 hrs   confidence: Answerer confidence 1/5Answerer confidence 1/5
ZZZ is being traded based on the acquisition ratios of YYY at way below par rating


Explanation:
Hello,

Just a guess, Rob. I hope I don't lead you astray. LOL.

MatthewLaSon
Local time: 12:43
Native speaker of: Native in EnglishEnglish
PRO pts in category: 6
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5 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
Yes


Explanation:
Not a discount as such, but ZZZ's shares are trading very cheaply compared to the ratios (share prices etc.) used to compute the price being offered for ZZZ, or, more correctly, the price per share determined FROM the acquisition price offered. Of course to determine cheapness one has to compare the relative market worth of ZZZ and YYY.

The sort of thing Le Journal des Finances throws at me all the time!

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Note added at 5 hrs (2008-09-22 19:30:44 GMT)
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IOW, if the intrinsic values of YYY and ZZZ are compared, and assuming the price-per-share equivalent offered for YYY is realistic and representative of that intrinsic value, then the current share price of ZZZ is way below what it should be.

Bourth (X)
Local time: 17:43
Native speaker of: Native in EnglishEnglish
PRO pts in category: 16
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15 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
at a big discount to the acquisition multiples for YYY


Explanation:
The 'multiples' are the ratios of the XXX's offer price on YYY to YYY's revenue, earnings, whatever (you don't need to know in order to translate this bit).
So, if XXX is offering 2x annual sales for YYY, when ZZZ is trading at just 1.5x, then XXX is offering a big premium for YYY based on where ZZZ is trading, and ZZZ is trading at a big discount to what XXX is offering for YYY.

rkillings
United States
Local time: 09:43
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 131
Grading comment
Thanks, Bob, for explaining this so clearly - I kind of had the idea but couldn't find a clear way to express it. Thanks also to Bourth and Matthew for your help.

Peer comments on this answer (and responses from the answerer)
agree  Bourth (X): You have such a way with words ...
2 hrs
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