Mr. Yap is pleased with Akujaya Berhad performance in successfully penetrating the Belgium market. He wishes to create more success and plans to acquire a new company. Akujaya Berhad has long been in the logistic industry, as the government now is promoting environmental, social and governance (ESC), the company wishes to focus on sustainability. Berjaya Berhad is a company operating in the same industry and their strength has become a factor that attracted Mr. Yap to acquire the company. The following is the information regarding these two companies. Both companies are 100% financed by the shareholders. Aku•a a Berhad Befa a Common shares outstandin 500,000 unit 100,000 Price er share RM5.OO RM4.OO Akujaya Berhad estimates that the value of the synergistic benefit from acquiring Berjaya Berhad is RM50,000. Akujaya Berhad is evaluating two possible alternatives either to pay RM6.00 in cash for every share of Berjaya Berhad or to offer 1 of its shares in exchange for 2 shares of Berjaya Berhad. Based on the above information should Akujaya Berhad acquire Berjaya Berhad? Using which alternative? Justify your answer by clearly showed the workings on Net Present Value. (20 Marks) Merger & Acquisition VT + changes in synergy post-merger=VB + VT NPV= VT* - cost of acquisition Where: value for targeted company plus the changes in synergy TVpost-merger =total value after merge value of targeted company value of bidder company Uncovered Interest Parity ( pls ues this format step by step Solution, cash consideration, share consideration)
Mr. Yap is pleased with Akujaya Berhad performance in successfully penetrating the Belgium market. He wishes to create more success and plans to acquire a new company. Akujaya Berhad has long been in the logistic industry, as the government now is promoting environmental, social and governance (ESC), the company wishes to focus on sustainability. Berjaya Berhad is a company operating in the same industry and their strength has become a factor that attracted Mr. Yap to acquire the company.
The following is the information regarding these two companies. Both companies are 100% financed by the shareholders.
|
|
Aku•a a Berhad |
Befa a |
|
Common shares outstandin |
500,000 unit |
100,000 |
|
Price er share |
RM5.OO |
RM4.OO |
Akujaya Berhad estimates that the value of the synergistic benefit from acquiring Berjaya Berhad is RM50,000. Akujaya Berhad is evaluating two possible alternatives either to pay RM6.00 in cash for every share of Berjaya Berhad or to offer 1 of its shares in exchange for 2 shares of Berjaya Berhad.
Based on the above information should Akujaya Berhad acquire Berjaya Berhad? Using which alternative? Justify your answer by clearly showed the workings on
Merger & Acquisition
VT + changes in synergy post-merger=VB + VT
NPV= VT* - cost of acquisition
Where:
value for targeted company plus the changes in synergy
TVpost-merger =total value after merge value of targeted company value of bidder company Uncovered Interest Parity ( pls ues this format step by step Solution, cash consideration, share consideration)
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