Are they unable to say "No."?
If some entity wanted to buy my eighteen dollar business for twelve dollars, to then sell it for ten, I would tell them, No.
Sigh. Business makes my brain hurt.
Let's stoichiometrically balance biological processes instead. Like fermentation.
Yeah, wait...beer. Let's drink instead! That almost never makes my brain hurt!
Your synopsis of @someguy2800’s model is incorrect - it’s NOT an 18 million dollar company, it’s a 12 million dollar company which is holding $18 million in cash and assets - THAT is what makes it a good buy. So when it has a $12m valuation, if someone makes a bid on it at $14m, the standing board would be foolish to not take it, as their internal hurdle at 16% IRR is only $13.9m. So the selling company makes their return target in the blink of an eye. Alternatively then, the buying company buys it at $14m, absorbs the $8m in cash, sells it at $10m, so they take home a net value of $18m on a $14m deal - again, a 16% IRR puts their hurdle at $16.2m, so they too are well ahead of their business target. Reminding here, that business hadn’t significantly changed in its products or services, so it’s valuation may not dip much below that original $12m even if it gets the cash drained - as it remains to hold $10m in asset value.
You don’t have to like it for it to be real for the world in which you live. The goal in any business management company - and ALL strategic boards for public companies share that same business management responsibility - is to make money. If you can make money by making and selling your products, great. If you make money by providing services, great. If you make your money by making strategic business acquisitions and divestments, great. That’s your job as a strategic business leader. In a “cash claim” game like we’re describing, it’s the duty of the purchasing company to evaluate the business for the merit of the business, so whoever buys that company at $10m gets the burden of making its IRR through product sales. It’s a good buy if they have good margins, as they’d be buying the company at its current asset value, assuming they have means to hit their 16% IRR hurdle through income/sales margin. In that case, give it a couple years to rebuild that cash on hand (under 5yrs), assuming their reinvestment in capital balances out their asset depreciation, and they would be EXACTLY back in the same position; $10m asset value, $8m cash on hand, and again, the company valuation likely wouldn’t grow much, since they didn’t increase asset value, meaning they basically kept the lights on, rather than sinking cash into investments which would materially increase their stock valuation - so they’d be worth that same $12m... no change in valuation, but an $8m cash grab, a $1.9m sellout grab, and an $8m cash growth - with a looming $1.9m sellout grab in its future... no change in value, but about twice the company valuation, about $20m, gained by 4 parties through acquisition and divestment...