As an Omnicom shareholder, I have been closely following the announcement of their likely eventual merger with Publicus. The announcement revealed that Omnicom shareholders will receive 0.813 newly issued ordinary shares of Publicis Omnicom Group for each Omnicom share they own (in addition to a $2/share dividend). I'm assuming .813 is the conversion ratio. My question is: how did they arrive at this ratio?
Thank you for your assistance.
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Isn't it just Publicis shares outstanding / Omnicom shares outstanding?
That's what I assumed, but the calculation: PUB 224 mil. divided by OMC 270 mil = .829 (not quite .813)
Are you factoring in dilution (use diluted shares outstanding) or the proper date (they could be going off of a historical date)?
You need to adjust for the special divi, which is disproportionate between PUB / OMC holders to equalise the post-transaction equity.
If you are just taking acquiror share count / target share count, you're assuming their pre-transaction equity value is exactly 50/50
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