+1-415-670-9189
info@expertsmind.com
Calculate the value of the merged company
Course:- Corporate Finance
Reference No.:- EM13501




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Corporate Finance

M&A

E-III Corp. is investigating the possible acquisition of Silicon Inc. Assume that both firms have no debt outstanding.

                                                                                    E-III Corp.                  Silicon Inc.

Pre-announcement stock price                                    $15.00                         $12.00

 

Number of shares outstanding                                    8 million                      6 million

The synergy from the acquisition is estimated to be $22 million. Both firms agree that Silicon Inc. will be acquired for $13.50 per share. They are negotiating methods of payment: an all-cash offer, a stock exchange offer, as well as a combination of cash and stock exchange offer ($7.5 cash per share of Silicon plus 0.4 shares of E-III per share of Silicon). Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Corporate Finance) Materials
Given your evaluation, try to develop an integrated inventory control policy that Randy should consider. Is there other information that you would like to see that might help
Find the net present value, internal rate of return, payback period, discounted payback period, and profitability index of the proposed project. Based on your analysis shoul
Computation of net income - Construct a conservative financing plan with 80% of assets financial by long-term sources. If McKinsee's earnings before interest and taxes are
Discuss which generic business-level strategy is best suited to keep the company you selected competitive. Offer supporting rationale for your explanation and be sure to ref
Assume that there are 10,000 shares of Green Valley's stock outstanding and that some recently sold for $45 per share. What is the firm's price/earnings ratio? What is its mar
Interest rates are a prominent topic nowadays. We should all be familiar with the impact that interest rate fluctuations can have on the economy, in finance, and our daily
Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost of capital
Why was there a need to implement JIT/Lean processes? Describe how methods were applied to the specific company, product or service. What was the quantifiable change following