Question

Shareholders of the firm Up-4-Grabs (U4G) have been offered $36.00 per share in cash for each of their U4G shares currently selling for $29.53. What is the control premium being offered in this cash deal? U4G is also considering a stock-swap offer from another firm, BuyNow, Inc. (BYN). BYN will issue one share for every two shares of U4G. At what price will BYN shares be equivalent to the control premium available in the cash offer? When news leaks out about the merger, BYN shares increase to $77.00 and U4G shares increase to $35.24. What control premium does BYN offer now?


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  • CreatedMarch 26, 2015
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