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?
Answer to relevant QuestionsHBABB Corp. has purchased all of the 10 million shares of BOBCO stock for $43.75 a share. BOBCO’s net asset value is $350 million. How much goodwill does HBABB need to consider on its balance sheet? Suppose part of the ...Firm A plans to acquire Firm B. The acquisition would result in incremental cash flows for Firm A of $10 million in each of the first five years. Firm A expects to divest Firm B at the end of the fifth year for $100 million. ...Posada Corp. (POS) expects to earn EBITDA of $4.2 million next year and expects slow but steady growth thereafter. POS’s three key competitors (nearly identical operations and growth prospects) are JET (EBITDA of $5.1 ...“A business should always be liquidated when the liquidation value exceeds the business’s value as a going concern.” Discuss why you agree or disagree with this statement. Keck Business Forms recently failed and will be liquidated by a court-appointed trustee who will charge $300,000 for her services. The preliquidation balance sheet follows. Assume that the trustee liquidates the assets for ...
Post your question