breakup value

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Breakup value

Breakup Value

The value of a division in a company if that division were its own independent company. Companies considering taking over another use the breakup value, among other metrics, to determine whether a takeover is worth the time and expense. It is also called the private market value.

breakup value

The market value of all the individual parts of a firm if the firm were to be broken up and the individual parts operated independently. If the breakup value of a firm exceeds the market value at which its stock trades, the firm may be managed and operated inefficiently. In such a case, stockholder holdings would increase in value if parts of the firm were divested. Many takeovers originate when raiders spot firms with breakup values that exceed the prices at which those firms' stocks are traded.
References in periodicals archive ?
He figures that, if McKesson ever makes it to the trading block and no bidding war jacks up the price, the breakup value would be about $90 a share with PCS alone accounting for about $50 a share.
slipped to 8th position in the table of Breakup value with the ratio of 258.
Come to think of it, Kmart's new shareholders, today's creditors, might recover more if Lampert looked strictly at the breakup value, but that's for another day's speculation.
The Breakup value of company's share as at 30 September 2012 was Rs86.
It was followed by Wah Nobel whose Breakup Value increased from Rs.
83 per cent on its Breakup Value over the last year due to increase in its reserves from Rs.
The breakup value of the certificate of Modaraba has gone up to Rs.
The following table illustrates the high Breakup Value in descending order as compared to preceding year: