Securities valuation is a tool for measuring the fair value of equity in a listed security or a subsidiary that is not listed, or will be acquired through a listed security.
What is the definition of a security fair value?
The fair value is the value of the assets less the value of the liabilities attributed to a security.
Why do business entities evaluate securities?
Companies determine the fair value of the equity of a company or business for many reasons, such as:
Mergers and acquisitions
- Acquiring assets or shares in a company
- Merger with another company
- New Asset Purchase Price Allocation – PPA in accordance with the International Financial Reporting Standards (IFRS 3, IFRS 13)
Change in ownership structure
- Introducing a new shareholder / partner in a company
- Public and private offering
- Business separations
- Exit the company
- Debt financing
What are the cases that require Securities Valuation?
The Capital Markets Authority “CMA” has defined, in the executive regulations, some cases that require securities valuation as follows:
|Ninth||2-9 and appendix 1 item 3||Companies intending to enter into a merger deal should seek consultancy from an independent Investment Advisor|
|Ninth||3-1-5 and Appendix 2 in items 4 and 10||The offeror, if listed in the stock exchange, should seek consultancy from an independent investment advisor in case of Voluntary Acquisition|
|Ninth||3-1-5 and Appendix 3 item 4||The offeror, if listed in the stock exchange should seek consultancy from an independent investment advisor in case of Non-Cash Acquisition.|
|Ninth||Appendix 4 item 9||The offeree should seek consultancy from an independent investment advisor in case of Competitive Acquisition.|
|Ninth||3-1-5 and appendix 5 items 3 and 8||The offeror, if listed in the stock exchange, should seek consultancy from an independent investment advisor concerning the offer in case of Mandatory Acquisition|
|Ninth||3-1-5 and appendix 8 item 3||The offeror, if listed in the stock exchange, should seek consultancy from an independent investment advisor concerning the offer in case of Reverse Acquisition|
|Eleventh||14-3||Obligating unlisted companies that buy their own shares (treasury shares) to evaluate the fair value of the share price.|
Do companies have to engage an investment advisor to undertake Securities Valuation engagements?
Yes, companies subject to the above articles should engage an investment advisor licensed by the Capital Markets Authority to undertake the assignments of securities. Valuation.
What is the added value to business entities from undertaking Securities Valuation?
- Determining the fair value of the company’s equity thus assisting investors or business entities in making key strategic and financial decisions.
- Attracting new potential investors.
Why Baker Tilly to provide this service?
Baker Tilly is distinguished by specialist professional experience and offers the following characteristics carrying added values to our clients as follows:
- A global consulting firm operating in the State of Kuwait;
- Baker Tilly has license as an investment advisor from the Capital Markets Authority;
- Local experience under an umbrella of a global network;
- Professional team with in- depth experience in providing investment consultancy services;
- Professional team with in- depth experience in providing investment and securities services.
- Bilingual team.