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Immense Appetite, Inc., believes that it can acquire Sleepy Industries and improve efficiency to the extent that the market value of Sleepy will...

Immense Appetite, Inc., believes that it can acquire Sleepy Industries and improve efficiency to the extent that the market value of Sleepy will increase by $5 million. Sleepy currently sells for $20 a share, and there are 1 million shares outstanding.
a. Sleepy's management is willing to accept a cash offer of $25 a share. Can the merger be accomplished on a friendly basis?
b. What will happen if Sleepy's management holds out for an offer of $28 a share?
Please explain the concept.  

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