Hey everyone,
When attempting to make a bid on a potential acquisition target (Publicly traded, 5-year forecast in the model), and the target has two classes of common shares outstanding: - Common Shares with all voting rights held by the controlling family (1.08% of total shares) - Class B Shares with no-voting rights but are entitled to a dividend (98.92% of total shares) There are no coat tail provisions, so you don't technically need to make a public bid for Class B shares. After determining the Equity value of the Target, would you break it down to share price by dividing the total 100% of outstanding shares as in most cases?
When modelling the synergies and considering the up-front merger costs ($150mm), if they are tax deductible, what would be the best bet to incorporate this into the synergies assuming a standard tax rate? - $150*0.40 = 60mm is the potential tax savings today - Would the impact on share price be: Equity Value + Synergies (Margin Improvement and Cost reduction) - Merger Costs + Tax Savings?
This is a very simplified scenario.
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