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For implied p/e ratio why is that they are not using combined company share price. Why only acquirer share price. In a share for share exchange dont we use the combined company share price?
It is because it is only the implied P/E ratio of Tidded that is asked for as implied by the offers, and Tidded is expected to choose one of the three options. Tidded shareholders are not in a position to be able to estimate what will happen to the share price after the acquisition and so will base their decision on the current price of the shares that they are offered.
Can you kindly compare it to Hav Co where again instead of a combined share price they have taken just the share price of hav co to value strand co premium? specimen sept 2018
Again, it depends on whether you are looking it from the point of view of the acquiring company (because they have information to estimate the new value of the shares) and they decide what premium they can afford to offer, or whether you are looking at it from the point of view of the shareholders of the company being acquired, because they do not have the information and will base it on the current share price.
This question effectively asked for both.
Sometimes it is not clear in which case, as always in AFM, state your assumptions and you will get the marks.
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