Question: Scenario: Large Cap Company A is taking over Large Cap Company B. Terms: Company A will pay one for one in shares for Company B,

Scenario:

Large Cap Company A is taking over Large Cap Company B.

Terms:

Company A will pay one for one in shares for Company B, in two months time. Company A will pay one of its shares for every one share in Company B. (1:1 ratio).

The initial terms of the takeover have been agreed by both companies.

Company A Trading $100

Company B Trading $85

Q/ What will the Bank / Prime Broker need to consider and what are the risks to cover? What fees will they earn?

Pre-Announcement Info ;

Company B was trading at $70 per share before takeover announcement,

Company A was trading at $100.

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