If it were purely a negotiation for purchase, I might agree. But they are talking about joining forces. Maximizing the valuation is probably less important than establishing their working relationship.

If it were me, I'd be more concerned with the "working together" part, so I would be open and transparent with what I am thinking, and who I am. If they come back with too small of a number, I could always say, "No." I figure they either will get along well and can come to a mutual agreement on this, or not. Trying too hard to make a deal happen sometimes just isn't the right answer, if the deal would be with people with whom you don't work well.