Your article about Ron Perelman's empire ("The Operator," Cover Story, Aug. 21) illustrates the difficulty of placing value on a privately held company. The method used by BUSINESS WEEK, if far more accurate than the method of Perelman's associates, may also overstate the value of Perelman's holdings.
Ironically, the biggest negative may be Perelman's own considerable management skills. A given in a public offering is that his eye and his interest would begin to move elsewhere. The company may not perform as well with his operating talents removed. That factor alone may lower the value by 10% to 30%. At a 30% discount, Revlon actually has no net worth. This, along with the other factors mentioned, accounts for the inability to get an initial public offering done in 1992 and could cause the same difficulty in 1996.