What price must Maxine's company not exceed for the acquisition to be valuable to shareholders?

For an acquisition to be valuable to shareholders, the purchase price must be below the value of the synergies that the acquisition is expected to generate. In this case, determining that maximum price is crucial for ensuring that the acquisition increases shareholder value.

If the selected price is $37 million, it indicates that this is the threshold at which the acquisition would still produce a net positive effect on the company's valuation from the perspective of its shareholders. Paying anything above that would mean that the costs outweigh the benefits derived from the acquisition, leading to a decrease in shareholder value.

Thus, setting the price cap at $37 million reflects an understanding of the underlying financials and value creation principles in M&A, which is vital for maintaining shareholder confidence and ensuring the strategic goals of the acquisition are met.