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1stly for cash offer why arent we taking synergy benefits while calculating the % gain, since it has been mentioned 30% synergy gain we attain
2ndly for sh for sh exchange, i didnt understand how the final % gain step has been done ..i.e
[($3.644 × 3 – $4.50 × 2)/2]/$4.50 × 100% = 21.5%
the *3 and *2 nd /2
why?The cash offer is at $5 per share and if the payment is in cash it is irrelevant to shareholders in Dentro what happens to the share price of Sigma after the acquisition.
If there is a share offer, then the new share price of Sigma is relevant.
For every 2 shares currently held in Dentro the shareholders will get 3 shares in Sigma.I someone holds 2 share in Dentro they are currently worth 2 x $4.50 = $9.
They will get instead 3 shares in Sigma and be worth 3 x $3.644 = $10.932So they will make a gain of $1.932 for every 2 shares they hold, which is 1.932/2 = $0.966 gain for every one existing share.
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