TRG, on 28 June 2022, announced it had rejected a fresh proposal from Cooke worth $4.85 per share, valuing the business at $US720 million ($AU1.04 billion). The latest bid follows earlier offers, which were also rejected, worth $4.67 and $4.80 respectively.

As disclosed in TRG’s official announcement to ASX, “the Company’s Board of Directors has evaluated the indicative proposal with the assistance of its financial advisor and has determined that the indicative proposal does not reflect the fundamental value of the business and is not in the best interest of shareholders. Accordingly, the Company’s Board has determined not to engage with Cooke regarding the indicative proposal.”

“The Board believes Tassal has an attractive independent future and is well positioned to deliver growth in shareholder value. The Board and management team remain focused on building on the company’s long history and delivering on our strategic objectives.”

1. Calculate the Cumulative Abnormal Returns (CAR) obtained during the event period (to be attached as, using the Excel template):
   • From 1 day before to 1 day after the announcement
   • From 2 days before to 2 days after the announcement
   • From 5 days before to 5 days after the announcement
2. After completing the above calculations and analyses, explain the price reaction of TRG to their announcement of the rejection of the indicative proposal, referring to capital markets research.

Use the step-by-step instructions for analysis

Answer rating: 100% (QA)

Before the announcement the stock price was rising from 358 on June 17th incorporating the effect of ... View the full answer