Michael Price is a legendary investor and someone I try to learn from whenever I get the chance. I mean, this is one the guys that taught Seth Klarman how to invest capital. A few years ago, Michael Price gave a speech to Bruce Greenwald's Value Investing course at Columbia Business School. While I do not have the transcript directly in front of me, his words can be summarized as follows: "Read proxies and bankruptcy disclosure statements because they tell you what rational buyers are paying for businesses."
"Tops proposed a multifaceted transaction pursuant to which it would acquire a substantial number of stores as going concerns with commitments to employ the unionized workers at those stores, act as the Debtors’ liquidation agent with respect to underperforming stores to conduct going out of business sales and liquidate the merchandise in the Debtors’ closing stores, extinguish approximately $72 million of prepetition withdrawal liability claims which otherwise would have been asserted by one of the Debtors’ multi-employer pension funds, and consensually reduce by approximately $27 million the claim of the Debtors’ largest supplier."
- LTM Revenue is ~$8.5B. Using PTFC's multiple gets you to $850M valuation
- LTM EBITDA is $100M. Using PTFC's multiple gets you to $770M