M&A Stock & Cash Deal Deal Price
Hey guys, I have a quick question about deal price calculation for cross-border stock and cash deal. Take AMEC and Foster Wheeler as an example. AMEC is trading at about 1083 pounds per share and Foster Wheeler at 31.57 USD per share. At deal close, Foster Wheeler shareholders will receive 0.8998 new AMEC securities and $16 cash for per share. How do I get to the actual deal price (dollar per share) for Foster Wheeler?
Offer price per share = stock component + cash component = (Exchange ratio x acquiror's share price) + cash per share = [0.8998 x 10.83GBP (~US$18)] + US$16 = ~$32 / share
For the acquiror's share price, it's usually the closing price on the day prior to announcement
Also note that AMEC's price is quoted in pence, not pounds. So it's 10.83 pounds
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