Need help with past exam paper q5

problem 5 (10 marks) The Mate UNC Corporation stock is currently trading at $40 per share. There are 20 million shares outstanding, and the company has no debt. You are a partner in a fim that specializes in leverage buyouts. Your analysis indicates that the management of this corporation could be improved considerably. If the managers were replaced with more capable ones, you estimate that the value of the would be increased by 50%. You decided to initiate a leveraged buyout and issue a tender offer for least a controlling interest 50 % of out-standing shares. What is the maximum amount of value you can extract and still complete the deal? a) What will be the price of the non-tendered (after the LBO) shares? (5 marks) b) Assuming you get 50% control of Associated Steel, calculate what your gain from this transaction will be. (5 marks) ither habili problem 5 (10 marks) The Mate UNC Corporation stock is currently trading at $40 per share. There are 20 million shares outstanding, and the company has no debt. You are a partner in a fim that specializes in leverage buyouts. Your analysis indicates that the management of this corporation could be improved considerably. If the managers were replaced with more capable ones, you estimate that the value of the would be increased by 50%. You decided to initiate a leveraged buyout and issue a tender offer for least a controlling interest 50 % of out-standing shares. What is the maximum amount of value you can extract and still complete the deal? a) What will be the price of the non-tendered (after the LBO) shares? (5 marks) b) Assuming you get 50% control of Associated Steel, calculate what your gain from this transaction will be. (5 marks) ither habili