Section _9A--HungryBigFish - Lecture #18 M&A Analysis: The...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture #18 M&A Analysis: The “HungryBigFish” Case November 2nd, 2010 Copyright 2010 by Rich Curtis
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
HBF SSM Shares Outstanding 100,000 60,000 Earnings $200,000/year $60,000/year Total Equity Market Value $6,000,000 $900,000 Pre -Merger Data : HBF SSM Share Price EPS P/E Ratio a. Please fill in the following table assuming no synergies. $60 $15 $2 $1 30 15
Background image of page 2
What is your best guess as to why HBF trades at 30 times earnings, while SSM trades at 15 times earnings? What will the growth rate of earnings of the merged firm be? What is are reasonable boundaries for the P/E ratio of the merged firm?
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
b. Given the terms of the stock-for-stock exchange, what is the “stated” value that is received for each share of SSM? Since every 3 shares of SSM stock held the SSMinnow shareholders receive 1 share of HBF worth $60 pre-merger, the “stated” value received is $20 for each SSM share.
Background image of page 4
What is HBF’s post-merger EPS? HBF
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/24/2011 for the course HADM 2225 taught by Professor Wellman, j during the Spring '08 term at Cornell University (Engineering School).

Page1 / 13

Section _9A--HungryBigFish - Lecture #18 M&A Analysis: The...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online