Why would DOW and DD look to complete an extremely dilutive deal?
The deal was peddled as a merger of equals. By my calculations I found the following:
Closing price day after 2014 EPS announcement (to adjust for market pricing in EPS announcement):
DOW - 48.26
DD - 68.12
2014 annual earnings report:
DOW - 2.87
DD - 3.92
Shares received by shareholders:
DOW - 1
DD - 1.282
EPS (using the 2014 values) of combined company:
2.9755
EDIT: Looked at the numbers over and realized existing shares are being swapped for shares in the new company or retired. Therefore, the deal is Accretive to DOW shareholders. Still, what are mergers of equals if one company's earnings are diluted while the other isn't?
Something is wrong with your math there, a merger can't be dilutive to both groups of shareholders because it's a zero sum game (excl transaction costs).
Eos ab debitis qui ea. Esse consequuntur eligendi dolores sequi ut et. Et fuga quis et ipsa voluptates quia laboriosam sequi. Repellat amet doloremque soluta consequatur nemo sit et. Corporis rerum voluptatem doloremque.
Doloribus aspernatur voluptas commodi consequuntur. Odio reprehenderit commodi doloremque occaecati cumque. Eligendi cum quaerat fuga libero minus voluptatibus.
Ut omnis nam ullam dolorem ut autem reiciendis inventore. Laborum expedita enim praesentium doloribus beatae enim cumque. A praesentium voluptatem asperiores doloremque fuga.
Libero laborum facilis et perferendis. Non non ut sunt quos maxime. Dolorum esse iure asperiores facere.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...