Impact of investment in share price/valuation
Hi,
Say a company is listed and has a market cap of $100m and has 2 business units with 2nd business unit owned in a separate entity owned by the parent/listed business.
Company is now raising $10m for the 2nd business units for a 10% stake so "on paper" the valuation of the 2nd business unit is now $100m. Obviously there will be balance sheet adjustments : cash is received, shares are being created etc.
How should/could this translate in terms of impact on the share price of the listed entity and how would cash be treated valuation-wise? (as the cash received is non-operating in nature: it's a one-off investment)
Thanks!
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