What is the synergy of this merger?
Suppose you decide to share 30% of the synergy to the target shareholders, what is your initial offer?
What is the maximum price you can offer?
Synergy of this merger = Equity value of the combined - (Equity value of the stand alone acquirer + Equity value of the standalone target) = 1,437.50 - (1,100 + 161.11) = 176.39
Suppose you decide to share 30% of the synergy to the target shareholders, then the initial offer = Equity value of the standalone target + 30% x Synergy value derived above = 161.11 + 30% x 176.39 = 214.03
Maximum price you can offer = Equity value of the standalone target + Synergy value derived above = 161.11 + 176.39 = 337.50
What is the synergy of this merger? Suppose you decide to share 30% of the synergy to the target shareholders, what is...
14. What is the synergy of this merger? 15. Suppose you decide to share 30% of the synergy to the target shareholders, what is your initial offer? 16. What is the maximum price you can offer? You are leading a team on a M&A deal. Suddenly your analyst has disappeared and you have the following unfinished spreadsheet. The acquirer and the target are assumed to have zero growth. Now it is up to you to finish this job. Acquirer Target...