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Question Workspace

Fullerton Furniture, Inc. would like to acquire Portsmouth Mattress Company. There are other companies that Fullerton Furniture could acquire. However, Portsmouth Mattress is aware that the only acquirer they would gain synergies with is Fullerton Furniture. Portsmouth Mattress does not have any unique technology or desirable asset. What is the likely outcome of this scenario?

a$.$ Fullerton Furniture will ignore its potential synergy with Portsmouth Mattress and look at other target companies even if they have less or no synergy.

b$.$ Portsmouth Mattress will hold out for a higher bid from another company regardless of non$-$synergy.

c$.$ Fullerton Furniture will make an offer to purchase Portsmouth Mattress at the valuation model's assumption of the most it should pay to make sure they make the acquisition.

d$.$ Fullerton Furniture will make a take$-$it$-$or$-$leave$-$it offer to Portsmouth Mattress, who will accept it$.$