Question
In: Finance
Harrods PLC has a market value of £121 million and 5 million shares outstanding. Selfridge Department...
Harrods PLC has a market value of £121 million and 5 million shares outstanding. Selfridge Department Store has a market value of £31 million and 2 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods' CFO concludes that the combined firm with synergy will be worth £167 million, and Selfridge can be acquired at a premium of £10 million. a. If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge,
a. what will the stock price of Harrods be after the acquisition? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b, What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer £41 million? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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3
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547.0
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3
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Earnings and FCF Forecast ($ million)
1
Sales
433.0
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Growth vs. Prior Year
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5.0%
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Cost of Goods Sold
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Gross Profit
154.4
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433.0
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B.
The projected pre-tax gains in operating income (in millions of
$) from the merger are:
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2020
2021
2022
2023
Pre-tax Gains in Operating Income
12
16
28
38
45
The projected pre-tax...
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million shares outstanding. Company B has a market value of equity
of $400 million and 25 million shares outstanding. Company A
announces at the beginning of 2019 that is going to acquire Company
B.
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$) from the merger are:
2019
2020
2021
2022
2023
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12
16
28
38
45
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