Estimates stand-alone intrinsic value

Assignment Help Financial Management

Reference no: EM131178808

Elf Aquitaine, a French integrated oil company, wishes to expand its scope by acquiring the U. S. oil services firm Bushwhacker (NASDAQ: BUSH). The target is an all- equity firm with 250 million shares outstanding; the most recent closing price was USD 19.73. Elf estimates a stand- alone intrinsic value of USD 24.25 a share and potential synergies of USD 4.00 a share. Most mergers are consummated when an acquirer pays a 25 percent premium that helps induce target shareholders to tender their shares. Also, a merger such as this one usually incurs transaction costs of USD 150 million. These costs include investment banker fees as well as costs incurred by Elf to internally pursue the merger transaction. Elf also estimates an integration cost of USD 120 million. What is Bushwhacker’s current market value (in millions)?

Reference no: EM131178808

Questions Cloud

Zidane red card case study : Watch a YouTube clip of the infamous Zinedane Zidane "head butt" from the July 9, 2006 World Cup championship match between France and Italy.

Strategic management become so important to today : Can you please provide a response to both questions separately with reference please. Why has strategic management become so important to today's corporations?

How political white collar crime differs from state crime : Define what is meant by the term crimes of globalization and discuss how they are both similar to and different from other forms of White Collar Crime. Discuss how political White Collar Crime differs from state crime or state organized crime, as d..

Which is the best bet and which is the worst for you : Describe the different bets you can make when you play roulette. Find the probability of each of these bets in the American version where the wheel contains the numbers 0 and 00. Which is the best bet and which is the worst for you?

Estimates stand-alone intrinsic value : Elf Aquitaine, a French integrated oil company, wishes to expand its scope by acquiring the U. S. oil services firm Bushwhacker (NASDAQ: BUSH). The target is an all- equity firm with 250 million shares outstanding; the most recent closing price was U..

Best practices in manufacturing : Evaluate and compare the effectiveness of computer-maker Dell's just-in-time process and Toyota's lean manufacturing practice in terms of manufacturing, potential risks, and environment in which they are most applicable. Note: Refer to Chapter 14 ..

Discuss the probability of winning the game of blackjack : Discuss the probability of winning when you play the game of blackjack versus a casino. Is there a winning strategy for the person playing against the house?

Managers in a business firm dependent : Do you believe that managers in a business firm are dependent upon the trust, commitment, and effort of others within the firm?

What is the current value of a share of efg stock : EFG Inc. reported EBIT of 8.5 million for last year. Depreciation expense totaled 5 million and capital expenditures came to 2.5 million. Free cash flow is expected to grow at a rate of 2.5% for the foreseeable future. EFG's equity beta is 1.25, the ..

User Account

All Pages