Question: Bulldog Industries is offering as consideration for merger target Blazerco
Bulldog Industries is offering, as consideration for merger target Blazerco, 1.5 shares of their stock for each share of Blazerco. There are 1 million shares of Blazerco outstanding, and its stock price was $50 before the merger offer. Bulldog’s preoffer stock price was $40. What is the control premium percentage offered? Now suppose that when the merger is consummated six months later, Bulldog’s stock price drops to $30. At that point, what is the control premium percentage and total transaction value?
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