medium · Investment Banking valuation-core
In a 'Football Field' chart, the LBO analysis range is often the lowest bar.
What does this 'LBO floor' represent in the context of an M&A auction?
- The liquidation value recovered from selling off the company's assets in a distressed fire sale
- The price level at which the company's existing debt becomes due and payable.
- The minimum equity valuation threshold that a target company's board sets to deter a hostile bidder
- The maximum price a financial sponsor can pay while still meeting its minimum IRR hurdle.
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