Is Jobstreet underpriced by Seek?

How can a footballer which is banned for four months, aged 27 years old be sold still at the 3rd highest price paid for a footballer ever? This is because he is one of the best despite the risk that Barcelona is taking with him potentially biting again - yes I am talking about Luis Suarez. It is very hard to find a player similar, barring the risk of further suspension on him if he bites again. Barcelona knows that they have to pay to get the best.

To get the best, you have to pay a high price, higher than fair. For a below average company, one should pay below average PE. For an average company, it should be priced at average PE. And for a top company, an above average price earning should be paid for. This is despite the price is at 29x PE. And this is what the Jobstreet's management did not negotiate well, despite they have some of the dream team of Malaysian best brains in its board. (And I am not saying Jobstreet bites)

For Seek to pay 29x PE and eliminate competition in many South East Asian countries, this is a dream come true. For a while, Jobstreet and Jobsdb are competing mainly as the top two in many countries - Malaysia, Singapore, Indonesia, Philippines.  As a football team, imagine you have all the best players after you have bought your competitors best. 

In fact - the football analogy may be different from business. In football, you can still buy many good players, to replace one top player, but in business you cannot just throw say RM1 billion to recreate another Jobstreet. It just does not work like this! And if you just do this, it will take many years - not immediately.

One cannot recreate a dominant company just like that and Jobstreet dominates together with Jobsdb in most of the countries they are operating in.

Note: I am bringing this up because Jobstreet is renegotiating the selling price with Seek.com as it seems that there is delay in Competitive Companies Singapore in approving the deal due to anti-competition law. And it seems that if the deal extends beyond July 1, 2014 - there is a right for Jobstreet to renegotiate or walk away from the deal. To me, the thing that Jobstreet is doing is right but it may be too eager to sell. It has to negotiate thinking that Seek is eliminating a key competitor - not based on fair value as in what most investment bankers will use i.e. comparative acquisition multiple.