In the interests of placating future investors, it is important that the takeover process and
the attached compensation follow a transparent procedure and agreed-upon rules. To that
end, the previously agreed-upon prices of YPF stock that were set back during the IPO,
which provided for this exact situation, are the most fair and should be adhered to. As the
case mentions, this results in a share price of $47.3/share or $56.7/share, depending on
how we define the day before acquisition; the former assumes April 16, 2012, while the
latter assumes January 27, 2012. April 16 was the day before the official acquisition, but
YPF share prices had fallen by then precisely because of rumors about the upcoming
expropriation. This decline in price does not represent any component of fair or intrinsic
value. $56.7/share, the price on January 27, 2012, is thus fairer as it represents unbiased
information.
However, $56.7/share is calculated by the Repsol, using highest P/E ratio. To avoid
valuation bias, we would like to use data from third parties to value the 51% stake of YPF.
In order to make sure the data independent of expropriation rumors, we calculated the
average price of all the latest target prices announced by the financial institutions before
Jan.27, 2012, which implies a fair value of $49.026/share. Taking 51.00% of the 393
million outstanding shares and multiplying it by $49, Repsol will get total compensation of
$9.8 billion approximately. We do not take into consideration of Control Premium since it
is not a regular M&A and the buyer would surely not pay for the premium. However, one
