Warnaco (WRC) Acquisition Confirms Model Price Calculation

The second most asked question I get is “ How can I be sure if your model price calculation is correct?”  The only way we can confirm to you that our model price calculation is accurate is look for corporate acquisitions, M&A activity, where two parties can transact a deal at a mutual agreeable price.  I guess I missed this one when it was announced at the time, but here is our model price chart of Warnaco Group as of last night.  This buyout of Warnaco occurred on October 31, of this year.

Warnaco with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

PVH Corp. (PVH) and The Warnaco Group (WRC) announced that they have entered into a definitive merger agreement pursuant to which PVH will acquire Warnaco common stock for $51.75 in cash and 0.1822 of a share of PVH common stock for each share of Warnaco common stock.

As you can see on our model price chart, we calculate model price everyday, with our nightly computer run – see purple dashed line on chart.  As you can see this transaction occurred spot on our model price calculation.  I have seen this so many times in the last 10 years, I sometimes forget how truly amazing this algorithm is in calculation model price or fair market value.

Since the beginning of ModelPrice Guy blog I have noted five other transactions where our model price calculation has been confirmed – see below for links.  These are data points for you to consider whether our model price calculation is robust and accurate.

In case you are wondering, the first most asked about question I get is “Do these EBV lines work?”

My other blogs of transactions confirming model price in both US and Canada.

Does Model Price Work? The Defense calls Gennum (GND.CA)

Another Data Point for Model Price – Flint Energy (FES)

BCE – Agreed to Acquire Astral Media “A” for $50 per share.

CVH – Aetna to buy Coventry Health. Confirmation of Model Price.

Leucadia Purchase of Jefferies Group (JEF) Confirms Model Price

And if interested two fun pieces on our  Model Price Calculation.

Model Price – Conversations About Model Price. (Part 1)

Model Price – Conversations About Model Price. (Part 2)

 

 

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