Question
Barney Plc has issued share capital of 150,000 ordinary shares. These shares were valued at 40 each on 1st February this year, reflecting Barney Plc's
Barney Plc has issued share capital of 150,000 ordinary shares. These shares were valued at €40 each on 1st February this year, reflecting Barney Plc's value as a stand-alone business.
On 10th February, Amazon Plc, a competitor of Barney Plc, announces that they are considering a takeover bid for Barney Plc. The market reacts positively to this news, and Barney Plc's share price increases to €48 per share as a result of this announcement.
Total benefits of €4.2 million are anticipated to result from Amazon's acquisition of Barney Plc. On 20th February, Amazon Plc completes its acquisition of Barney Plc, with a cash bid of €8 million.
Determine how the benefits of the acquisition are allocated between Amazon Plc shareholders and Barney Plc shareholders, based on the information above.
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Financial Accounting and Reporting
Authors: Barry Elliott, Jamie Elliott
14th Edition
978-0273744535, 273744445, 273744534, 978-0273744443
