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This will be a sacrifice of his domain. A 301 is the way to go.  Any links and any traffic that he has could benefit PageX directly and your overall site slightly. The value of this redirect would depend upon his traffic and the number and quality of links pointing to his website.  If he has a good site with good links and rankings you will make out big time.   If this site has no traffic and links then you will not gain much. What about his content?  Does he have any great articles or other things that might attract search volume and links.  Maybe he would allow you to republish them.  Then redirecting their original URLs to those new pages on your site would work well.  Or, to same-topic pages on your site if his content of similar or lower quality as yours. Check on his historic traffic and traffic sources by viewing his google analytics or running log analysis.   This can identify valuable pages and streams of traffic.

Its a shame there isent an algorithm that one could look at to determiine the value of links

No-follow gives your link profile a natural look but it will not pass pank rank and will therefore recieve 0 direct SEO benefit. That said, don't under estimate the usefulness of getting traffic from a good directory. How much are they charging?