2. (20 points) North Pole Enterprises, Inc. (NP) is now looking to acquire Fun in the Sun, Inc. (FNS) in a cash transaction. The standalone value of NP is $25 million. The standalone value of FNS is $6.00 per share and there are 2 million shares outstanding. If the companies combine, NP believes it could realize an additional $3 million of value (ie synergies) as a result of revenue enhancements and cost saving initiatives. (You can ignore taxes) - What is the most that NP should pay for FNS? - What is the least FNS would accept? - What is the value of the combined firm? - What is (1) action NP should take when acquiring FNS to ensure a successful acquisition? 2. (20 points) North Pole Enterprises, Inc. (NP) is now looking to acquire Fun in the Sun, Inc. (FNS) in a cash transaction. The standalone value of NP is $25 million. The standalone value of FNS is $6.00 per share and there are 2 million shares outstanding. If the companies combine, NP believes it could realize an additional $3 million of value (ie synergies) as a result of revenue enhancements and cost saving initiatives. (You can ignore taxes) - What is the most that NP should pay for FNS? - What is the least FNS would accept? - What is the value of the combined firm? - What is (1) action NP should take when acquiring FNS to ensure a successful acquisition