It turns out that Facebook has been considering buying Twitter for several years. Facebook estimated that the synergy gain from the merger is $1000 million. 

Currently, Facebook shares are trading for $20 and there are 1,000 million stocks outstanding. Facebook is interested in a swap deal with Twitter. Recall that Twitter has 100 million shares outstanding, and is currently traded at $30 per share. 

If Facebook's management does not want Facebook to lose value from the deal, What will be their best offer to Twitter?

Answer rating: 100% (QA)

To ensure that Facebook does not lose value from the deal they should offer Twitter an amount that i... View the full answer