Question: the directors of tab limited have appointed you as a merger and acquisition specialist. They are considering the take off of Fanta limited and you

the directors of tab limited have appointed you as a merger and acquisition specialist. They are considering the take off of Fanta limited and you to advise them whether or not to proceed with this project the following market information is supplied to you: earnings market. number per share. price per. of share share

tab 415 c. R5. 4 million
Fanta. 352 c R4. 2 million

additional information

cash payment of R6 million to Fanta LTD
synergy of 7 million will benefit the takeover

Required

3.1 calculate the value of the proposed take over
3.2 calculate the net present value of the take over
3.3 calculate the take over premium
3.4 calculate the post over market price of the share
3.5 calculate the post take increase/decrease price of the share

assume the take over was based on earnings per share

3.6 calculate the exchange ratio based on earnings per share
3.7 calculate the total number of shares in the take over
3.8 calculate the post over earnings per share
3.9 calculate the benefits if any to the companies

earnings. market. number
per. price per. of
share. share. shares
tab. 415 c. R5. 4 million
Fanta. 352 c. R4. 2 million

additional information

cash payment of R6 million to Fanta LTD

synergy of R6 million will benefit the take over

required

3.1 calculate the value of the proposed take over

3.2 calculate the net present value of take over

3.3 calculate the over premium

3.4 calculate the post take over market price of the share

3 5 calculate the post over increase/decrease price of the share

assume the take over was based on earnings per share

3.6 calculate the exchange ratio based on earnings per share
3.7 calculate the total number of shares in the take over
3.8 calculate the post take over earnings per share
3.9 calculate the benefits if any to the companies

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