Hi Moneys,
I have learned the merger model, and the rule of thumb along with it for all-stock deal - if buyer's P/E is greater than seller's, accretive, and vice versa).
But, what P/E do u actually look at? I know the seller's P/E will be its "purchase" P/E where P is the equity value paid by buyer, but what about the E? Shouldn't it be seller's earnings one year after the deal closes?
Thank you for any thoughts.
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