Barney Plc has issued share capital of 150,000 ordinary shares. These shares were valued at 40 each
Question:
Barney Plc has issued share capital of 150,000 ordinary shares. These shares were valued at €40 each on 1st February this year, reflecting Barney Plc's value as a stand-alone business.
On 10th February, Amazon Plc, a competitor of Barney Plc, announces that they are considering a takeover bid for Barney Plc. The market reacts positively to this news, and Barney Plc's share price increases to €48 per share as a result of this announcement.
Total benefits of €4.2 million are anticipated to result from Amazon's acquisition of Barney Plc. On 20th February, Amazon Plc completes its acquisition of Barney Plc, with a cash bid of €8 million.
Determine how the benefits of the acquisition are allocated between Amazon Plc shareholders and Barney Plc shareholders, based on the information above.
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott