David Prosser: So, how much is the company really worth?

The short answer is as much as a buyer is prepared to pay for it. But whether the £418m that News Corp paid for the television production company represented good value is another question.

Still, businesses do not simply pluck numbers out of the air when making an acquisition. Valuing a company is an art as well as a science, but there are some basic principles to follow.

Even quite a young company will have figures showing its past earnings. The price-to-earnings ratio (the value of a business divided by its annual profits) is the most common way in which to calculate a company's worth. Similar companies should trade on similar ratios.

Britain's independent television production sector is not big enough to have seen a string of deals against which to judge the acquisition of Shine. But there is one transaction to which News Corp's angry shareholders might point. Last year, Time Warner took a controlling stake in Shed Media, the producer of Waterloo Road and Supernanny, in a deal that valued the company at £100m. Shed was on target to make a profit of around £12m last year, giving a price-to-earnings multiple of just over eight.

By contrast, Shine made a profit of £5.5m in 2009, the last year for which figures are available. Sales accelerated last year, but even if we charitably say that profits might have hit £10m, the News Corp purchase puts the deal on a price-to-earnings ratio of more than 40. So, a clear case of nepotism? Not necessarily. There may be all sorts of explanations for such discrepancies – different growth prospects, the quality of key staff and a changing economic environment. Still, it will be tough to argue it was cheap.