Hello,

Based on the attached case - TheBest Deal Gillette Could Get?: Proctor & Gamble's Acquisition of Gillette . Can you provide answers to the following questions. Thank you

1)What was the structure of the offer made by P&G for Gillette? Specifically, was it a cash deal or a stock-swap, and what were the important terms of the offer?

2)In the scenario just described (question #1), what would the premium have been for Gillette's shareholders selling their firm to P&G?

3)Before the offer for Gillette was announced (i.e., at the close of trade on 1/26/2005), P&G's stock price was $55.44 and the firm had 2,522.583 million shares outstanding (fully diluted).If the proposed merger produced ZERO synergy, what would happen to P&G's stock price after the merger is completed?

4)Right after the deal was announced P&G's stock price dropped about 4% to $53.23.

Based on this market price for the acquirer's stock, how much synergy was the

market expecting this acquisition to produce (in dollar terms)? And in this

scenario, what would the premium have been for Gillette's shareholders selling

their firm to P&G?

5)Explain carefully the difference between the three valuations of Gillette on the right-hand side of Exhibit 6 (under "Discounted Cash Flow Analysis"). Which of these do you think is the most relevant for assessing the offer made by P&G for Gillette?

6)Is this market reaction in P&G's stock consistent or inconsistent with the empirical evidence that we discussed in class about stock market reactions to M&A announcements?