BL-2022-002117 - [2025] EWHC 2794 (Ch)

Mr Davidson’s expert opinion is that the company was worth £2 million in December 2016. I do not accept that opinion.

The starting point is the Trilantic enterprise valuation of £67 million, although by the time of the revised proposal it had effectively been reduced by £12 million being taken off the table and converted into contingent loan notes which were highly unlikely to achieve the conditions. Arguably, even £55 million is potentially too high as Trilantic had qualms and concluded that it was not willing to go ahead with the transaction at that price and because the deal as structured included the roll over into owners and management loan notes of a significant part of the headline enterprise value, the terms of which are not known, and it is impossible to place a value of any discount for deferral and uncertainty. Nevertheless the Trilantic proposal provides a ball park for the value of the company.

Mr Davidson is critical of Trilantic’s valuation and of Trilantic’s apparent willingness to accept 3AAA’s projections for growth which Mr Davidson says were unrealistic. However Trilantic was a large and successful private equity fund which had done considerable due diligence. It had moved during the process from an opening offer of £100 million to £67 million, no doubt because it was better informed. I do not accept Mr Davidson’s assessment that Trilantic became a special purchaser when the levy-cap was announced because it had become so invested in the proposed transaction that it could not walk away. Mr Davidson confirmed that he was referring to Trilantic acting illogically and uncommercially because of emotional and psychological drivers. I do not accept that is at all likely of a significant private equity fund. In fact Trilantic reassessed the deal with its Investment Committee because the investment thesis had changed and the revised offer it reverted with effectively took £12 million off the enterprise value. And, it then did walk away. There is no evidence at all of Trilantic acting uncommercially.

Mr Davidson placed a figure of £2 million for the true value of 3AAA “based on actual performance” before and after the Decision Letter. He sought to reinforce that conclusion by pointing to errors in the accounts which he calculated would have led to an account restatement claim under the SPA, which would have led to the repayment to Trilantic of some £24.45m. In cross-examination, he accepted making a simple mathematical error in thinking this would have left the shareholders with £2-3m and accepted that it would have left them with £17.5m in cash and loan notes. This analysis did not support his valuation and I do not accept his opinion as to the value of 3AAA.