The founder of Company XYZ is considering selling the company to the highest bidder and hired a financial consulting firm to create a DCF valuation of the company. The DCF valuation capitalizes the firms expected free cash flows (FCF) at the Weighted Average Cost of Capital (WACC), assuming perfect liquidity, full control, and no synergies.

The DCF valuation suggests a fair DCF-value of Company XYZ of $80 million. The report also mentions that different buyers might have different valuations. In particular, the report states the following:

Typical discount for lack of liquidity: 40%

Typical discount for lack of control: 20%

Typical synergy premium: 30%.

The founder is aware of two (and only two) potential buyers:

Buyer A is a privately held strategic buyer

Buyer B is a publicly-traded financial investor

Both A and B are interested in buying the full company (100% of the firms equity).

Assume that Company XYZ will be sold in an auction, in which A and B are the only participants. Which bidder will win the auction and what NPV will the deal have to that bidder?