ABC will be merging with Target Corporation. Equity values were gathered as follows: ABC, separate equity value = P13,000,000; Target, separate equity value = P2,500,000. The merged entity, ACBT Inc., will have annual net earnings of P3,060,000 and a required return on equity of 18%. *How much is the value of synergy of the merger?
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ABC will be merging with Target Corporation. Equity values were gathered as follows: ABC, separate equity value = P13,000,000; Target, separate equity value = P2,500,000. The merged entity, ACBT Inc., will have annual net earnings of P3,060,000 and a required return on equity of 18%.
*How much is the value of synergy of the merger?
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- Parentis Ltd. has a value of $150million while the value of Sandis Ltd. is $70million. A merger between the two has just gone through and cost savings with a present value of $ 10million is expected to be achieved. Parentis Ltd. paid cash of $85million for the entire paid up capital of Company B.Requiredi. What is the value of the two firms after the merger? ii. Calculate the cost of the merger to the shareholders of Parentis Ltd.iii. What is the portion of the gain/loss due Parentis Ltd.’s shareholders?iv. From the perspective of the shareholders of Company A, is there an economicjustification for the merger?Koala Technologies is considering the acquisition of Laser Industries in a stock-for-stock exchange. Selected financial data for the two companies is shown below. An immediate synergistic earnings benefit of $2.5 million is expected in this merger. Sales (millions) Net income (millions) Koala $90 $9.4 O a. $2.23 O b. $2.75 O c. $2.25 O d. $2.21 Laser $10 $1.2 Common shares outstanding (millions) 4.0 0.8 Earnings per share $2.35 $1.50 Common stock (price per share) $35.00 $27.00 Calculate the post-merger EPS if the Laser shareholders accept an offer of $33.25 a share in a stock-for-stock exchangeFirm A has a total market value of RM 200 million. It is planning to acquire Firm B, which has a total market value of RM 630 million. Firm A estimates that the merged firm will be worth RM 3050 million as a result of operating efficiencies. The financial accountants are advising that Firm A will have to pay a premium of RM 24 million in price to acquire Firm B. merger related costs and expenses are estimated at RM 42 million. Is there an advantage arising from merger, in particular to Firm A?
- ABC will be merging with Target Corporation. Equity values were gathered as follows: ABC, separate equity value = P13,000,000; Target, separate equity value = P2,500,000. The merged entity, ACBT Inc., will have annual net earnings of P3,060,000 and a required return on equity of 18% 1.) How much is the intrinsic value of the merged entity?Kunla Ltd and Cunta Ltd intend to merge. The following were observed just before the merger announcement. Kunla Ltd Cunta Ltd Market price per share GH¢ 400 GH¢200 Number of shares 2,000,000 1,000,000 Market value of firm GH¢ 800,000,000 GH¢ 200,000,000 The proposed merger will create GH¢50,000,000 in synergies. Kunla Ltd intends to pay GH¢ 130,000,000 cash for Cunta Ltd. What is the cost of the merger to Kunla Ltd? Compute the NPV of the merger. The managers of these firms have proposed to merge to diversify their activities and to reduce risk. Should you pay a premium for the merged firm? What convincing reasons can these managers give for the proposed merger? What roles do investment banks play in facilitating M&A deals?There are only five companies in the market. Company B and Company D are planning to merge. Market shares of all the competitors are shown in the table below. Company Market share, %% A 4040 B 2525 C 1414 D 1212 E 99 Calculate the difference between the HHI value after the proposed merger and the initial value. Write the exact answer. Do not round.
- Consider the following data in relation to a proposed acquisition, where Firm B will take over Firm A in a horizontal takeover. Pre-merger Value A $550m Pre-merger Value B $420m Post-merger Value A + B $1,150m Cash Offer $580m Share Offer 52% of Shares in A + B Estimate the gains available from the merger. Estimate the value of the merger to firm A’s shareholders under both the cash and share offer. Estimate the value of the merger to firm B’s shareholders under both the cash and share offer. Which offer will predominate, cash or shares, if the shareholders of A are given the choice?Nataro, Inc is planning on merging with Celestia Corp. Nataro, Inc with will pay shareholders the current value of their stock using shares of Nataro as the form of payment. Nataro has 5600 shares outstanding at a market price of $27.25 per share. Celestia Corp has 8,000 shares outstanding at a market price of $5.75 per share. The expected synergy created by the merger is $4200. What is the value of the merged firm (excludes cost of acquisition)? A. 205600 B. 201400 C. 159600 D. 54400 E. 68750Prior to a potential merger Ross Co has 4500 shares outstanding at a market price per share of $31. Bulbs Inc has 2,800 shares outstanding at $18 per share. Assume Ross Co has estimated the valueof the synergistic benefits from acquiring Bulb Inc to be $3,500. Nowther firm has outstanding debt. The acquiring firm offered a price of $19.75 per share to the target. If the deal goes through, what is the merger premium? A) 4900 B) 3500 C) 2800 D) 6125 E) 0
- Dongle Corp. is analysing an acquisition of Tingle Inc. Dongle has 10 million shares outstanding, which sell for $40 each. Tingle has 5 million shares outstanding, which sell for $20 each. The merger gains are estimated at $25 million. If Dongle Corp. has a price-earnings ratio of 12 and Tingle has a P/E ratio of 8, what should be the P/E ratio of the merged firm? Assume in this case that the merger is financed by an issue of new Dongle Corp. shares. Tingle will get one Dongle share for every two Tingle shares held. (Do not round intermediate calculations. Round your answer to 2 decimal places.) P/E 18.14ABC and XYZ have total equity values of P5,000,000 and P10,000,000 respectively. If they merged, a total of 30,000 P500-par value shares may be issued. Each share can provide investors a rate of return of 18%, a growth rate of 3% and annual dividends of P78 per share for the first year. What is the total value of synergy that the merger will provide?Wilson Industries is considering the acquisition of the Blanchard Company in a stock-for-stock exchange. Selected financial data for the two companies are shown next. An immediate synergistic earnings benefit of $3 million is expected in this merger, due to cost savings. Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Earnings per share Dividends per share Common stock (price per share) $ +A Wilson $84 $21 8 $ 2.625 $ 2.00 $34 Blanchard $74 $9.0 6 Calculate the postmerger earnings per share if the Blanchard shareholders accept an offer of $19 per share in a stock-for-stock exchange. Round your answer to the nearest cent. $1.50 $ 1.10 $15.00