What will the stock price of harrods be after acquisition

Assignment Help Finance Basics

Reference no: EM131424161

Merger NPV Harrods PLC has a market value of £450 million and 18 million shares outstanding. Selfridge Department Store has a market value of £120 million and 11 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods's CFO concludes that the combined firm with synergy will be worth £625 million and Selfridge can be acquired at a premium of £55 million.

a. If Harrods offers 4 million shares of its stock in exchange for the 11 million shares of Selfridge, what will the stock price of Harrods be after the acquisition?

b. What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer of £140 million?

Reference no: EM131424161

Questions Cloud

Fact benefit croatia to adopt the euro : Croatia is an EU member nation; it does not yet qualify to join the euro zone, but aspires to eventually do so. What factors determine whether it would in fact benefit Croatia to adopt the euro?

How many different wash dry crews are possible : Suppose there are two girls and three boys in the family. If the two girls are selected to wash and dry, is there any evidence to suggest the selection process was not random? Justify your answer.

Competitiveness and commensurately high current account : Greece has been notorious for its lack of competitiveness and commensurately high current account deficits. Yet in 2016, Greece's current account was approximately balanced. How can one account for this apparent anomaly?

Evidence to suggest the selection process was not random : If none of the 10 displayed books is written by faculty members from the College of Science and Technology, is there any evidence to suggest the selection process was not random? Justify your answer.

What will the stock price of harrods be after acquisition : If Harrods offers 4 million shares of its stock in exchange for the 11 million shares of Selfridge, what will the stock price of Harrods be after the acquisition?

Relationship between labor and output : A firm is hiring labor in a perfectly competitive market. The relationship between labor and output is given below. Assume labor is only available in whole quantities (ie L = 2.5 not possible). The current market wage is $100

How would you characterize the leadership style of a manager : How would you characterize the leadership style of a manager or boss for whom you have worked? Why?How have you contributed to team projects in your school or professional life? How would you describe your role within a team?

How does costcos business strategy provide value to consumer : How does Costco's business strategy provide value to the consumer? How does Costco's strategy provide a competitive advantage over their primary competitors?

What is probability that crew will include one of painters : Eight of the painters have been cited by a supervisor for improper painting. What is the probability that the crew will include one of these painters?

User Account

All Pages