Which line of the bid comparison would you fix first?
What must you establish before ranking the offers?
The question
In a separate fictional sale, Alder Metering gets a $95m offer for its software unit and a $108m offer for the whole company. An AI draft calls the whole-company offer $13m better. The software-unit bid leaves the hardware unit with the seller.
“What must you establish before ranking the offers?”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Choose your approach
What would you do here? Open the move you’d make.
Accept the $13m gap and move on to the closing timetable.
Tempting, but it misses something. The quoted gap omits the value and claims that remain with the seller.
Check which assets and claims each bid covers in the dated source documents.
The strong move. The arithmetic difference does not compare the same set of assets and claims.
See how a strong candidate says it
“The first bid leaves hardware with the seller. Value the retained unit and trace the allocation of debt and cash before comparing proceeds.”
Why it works: The arithmetic difference does not compare the same set of assets and claims.
Step 2: Find the controlling terms
What would you do here? Open the move you’d make.
Trace the offer scope to the dated filings.
The strong move. Use the dated documents to identify what each bidder would buy.
Trust the draft summary because both numbers appear in it.
Tempting, but it misses something. A summary can copy the numbers and still omit the scope.
See how a strong candidate says it
“Use the dated documents to identify what each bidder would buy.”
Why it works: A summary can copy the numbers and still omit the scope.
Step 3: Identify what remains
What would you do here? Open the move you’d make.
Identify retained assets and liabilities.
The strong move. The software bid leaves the hardware unit with Alder. Estimate that unit’s value and identify the debt and cash it keeps.
Assume the hardware unit has no value.
Tempting, but it misses something. The seller still owns the retained unit and bears its obligations.
See how a strong candidate says it
“The software bid leaves the hardware unit with Alder. Estimate that unit’s value and identify the debt and cash it keeps.”
Why it works: The seller still owns the retained unit and bears its obligations.
Step 4: Report what the evidence supports
What would you do here? Open the move you’d make.
State what you can establish and what is missing.
The strong move. The $13m gap compares different assets. Hold the ranking until both offers use the same basis.
Rank the offers on the difference in their headline prices.
Tempting, but it misses something. The price gap alone cannot settle which offer yields more equity value.
See how a strong candidate says it
“The $13m gap compares different assets. Hold the ranking until both offers use the same basis.”
Why it works: The price gap alone cannot settle which offer yields more equity value.
The answer, in short
- Decision
- The first bid leaves hardware with the seller. Value the retained unit and trace the allocation of debt and cash before comparing proceeds.
- Because
- The arithmetic difference does not compare the same set of assets and claims.
- What would change it
- A dated schedule of transferred assets and assumed debt would let me put both offers on the same basis.
Common traps
- Accept the $13m gap and move on to the closing timetable.
Check your answer
- Did I state which values and assumptions I used?
- Find the controlling terms?
- Identify what remains?
- Report what the evidence supports?
Last reviewed Nov 10, 2026