1. AQI is considering acquiring TRGP. AQI has 200 million shares at a current price of $20 per share. TRGP has 50 million shares at $30 per share. AQI estimates that there are $300 million in synergies to purchasing TRGP. TRGP is willing to be purchased for $32 per share

a) What is the NPV of the acquisition to AQI?

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B) what will AQI's share price be after the acquisition? C) what is the value of the acquisition premium? D) instead, suppose that TRGP is willing to be purchased for 50 million shares of AQI. AQI wou B) what will AQI's share price be after the acquisition? C) what is the value of the acquisition premium? D) instead, suppose that TRGP is willing to be purchased for 50 million shares of AQI. AQI would issue new shares to finance the purchase of TRGP. What would be the new share price of AQI if the complete this transaction? Would it be a positive NPV acquisition? E) Instead suppose that TRGP is willing to be purchased for a combination of 500 million in cash plus shares in AQI. What is the maximum number of new shares that AQI could issue and distribute to TRGP shareholders for the merger to not be negative NPV to AQI? B) what will AQI's share price be after the acquisition? C) what is the value of the acquisition premium? D) instead, suppose that TRGP is willing to be purchased for 50 million shares of AQI. AQI wou B) what will AQI's share price be after the acquisition? C) what is the value of the acquisition premium? D) instead, suppose that TRGP is willing to be purchased for 50 million shares of AQI. AQI would issue new shares to finance the purchase of TRGP. What would be the new share price of AQI if the complete this transaction? Would it be a positive NPV acquisition? E) Instead suppose that TRGP is willing to be purchased for a combination of 500 million in cash plus shares in AQI. What is the maximum number of new shares that AQI could issue and distribute to TRGP shareholders for the merger to not be negative NPV to AQI? B) what will AQI's share price be after the acquisition? C) what is the value of the acquisition premium? D) instead, suppose that TRGP is willing to be purchased for 50 million shares of AQI. AQI wou B) what will AQI's share price be after the acquisition? C) what is the value of the acquisition premium? D) instead, suppose that TRGP is willing to be purchased for 50 million shares of AQI. AQI would issue new shares to finance the purchase of TRGP. What would be the new share price of AQI if the complete this transaction? Would it be a positive NPV acquisition? E) Instead suppose that TRGP is willing to be purchased for a combination of 500 million in cash plus shares in AQI. What is the maximum number of new shares that AQI could issue and distribute to TRGP shareholders for the merger to not be negative NPV to AQI?

Answer rating: 100% (QA)

Acquisition Analysis of AQI acquiring TRGP Given AQI shares outstanding200 million AQI share price20 TRGP shares outstanding50 million TRGP share pric... View the full answer