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   The International Association of Certified Valuation Specialists

Valuation News Updates

03-08-2022 19:43 | Lisa Guo (Administrator)

Secret witnesses may appear in overvaluation case

In a New Jersey class action, plaintiff shareholders of publicly held Ascena Retail Group alleged that the company misrepresented the value of its goodwill and trade names to inflate the stock price artificially. Ascena, a clothing retailer, had acquired another clothing retailer (the parent company of Ann Taylor and LOFT) in 2015. In June 2017, the company announced a $1.3 billion impairment charge against the goodwill and trade names, causing its stock price to plummet. But the plaintiffs contend that the company should have taken the impairments earlier because there were multiple contemporaneous indicators that its assets were impaired. The company filed a motion to dismiss the complaint, and the court granted it but did so without prejudice. This allows the plaintiffs to amend their complaint and go back to court—and they say they have “confidential witnesses” that will show that the company knew the assets were impaired earlier.

There are many details in the case, which is In re Ascena Retail Grp., Inc. Sec. Litig., 2022 U.S. Dist. LEXIS 114434; 2022 WL 2314890, and a case analysis and full opinion are available on the BVLaw platform.

Corona is still the most valuable beer brand, per Brand Finance study

Corona has retained the No. 1 spot on the list of the world’s most valuable beer brands, according to “Beers 50 2022,” an annual report from Brand Finance. During the pandemic, the Corona brand hit some trouble because of the similarity of its name to coronavirus, which put off some consumers, especially in the United States. Despite that, Corona’s value jumped 21%, to $7 billion, in the wake of the entertainment economy reopening post-COVID-19. Not far behind Corona is Heineken in the No. 2 spot, with Budweiser, Bud Light, and Modelo Especial rounding out the top-five valuable brands. The fastest-growing beer brand is Desperados (up 57%, to $564 million), and new entrant Kronenbourg saw its brand value grow 40%, to $601 million. What’s become of some of the once-famous U.S. brands, such as Pabst, Schaefer, Schlitz, and Miller (the “Champagne of Beers”)? They’re still around but not on the Brand Finance Top 50 list.

New valuation credential planned for healthcare compensation

During a recent BVR webinar, Tim Smith (TS Healthcare Consulting LLC) told the audience that a new credential is in the works for valuing the compensation of healthcare providers (physicians, physician assistants, and nurse practitioners). The credential (including professional standards) will be offered by the American Association of Provider Compensation Professionals (AAPCP), a relatively new nonprofit group whose members advise and lead healthcare organizations on provider compensation, contracting, planning, recruitment, retention, strategy, and, yes, valuation. The fair market value of physician compensation and related arrangements is an area subject to increasing scrutiny and complex regulations. The determination of FMV is handled by staffers at healthcare systems as well as external valuation experts, and both these groups are among the ranks of AAPCP members.

Smith heads the credential committee at the AAPCP, and he is the author of the just-released Complete Guide to Fair Market Value Under the Stark Regulations.

What to do when job candidates take their sweet time

You’ve found a promising candidate to fill that vacant analyst spot and made an offer—but you can’t get an answer. The candidate gives you a date for an answer but then keeps delaying it. Consider an option that may not immediately come to mind, which is simply to retract the offer, advises John Borrowman (Borrowman Baker LLC), a recruiter who has worked exclusively in the BV profession for over 20 years. “The wiser course, obviously, is to avoid putting yourself in that position,” he says. “As the employer, you control the process up until the moment you actually make an offer. At that point, power tips to the candidate. Your goal is to strengthen your control beyond the point where you might ordinarily give it up.” Tactics include sharing a hiring timeline with the candidate and stressing that a prompt response will be needed if an offer is made. Also, give candidates everything they need to make a decision (such as a benefits summary) and make sure they know they can ask questions. After all this, if the candidate keeps delaying an answer, you’re justified in retracting the offer, Borrowman says. “Someone who consistently makes and breaks commitments is not likely someone you want in your practice.”

In his latest newsletter, Borrowman also explores remote work arrangements, how to smarten up your hiring process, and trusting gut instincts.

Global BV News

Takeover premiums in Canada increased in the first half of 2022

The median takeover premium of Canadian public companies in the first half of 2022 was 40%, a 7% increase from the prior year, according to “Canadian M&A Insights” (Summer 2022) from Kroll. The Canadian M&A market had 925 completed transactions in the first half of 2022, down from 1,008 in in the first half of 2021, likely due to economic precariousness, the report says.

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