Cadbury wishes to acquire Nestle. The takeover is a hostile takeover by Cadbury, as Nestle shares have been dropping significantly due to a fraudulent contract that Nestle signed up to purchase coco beans from farms using hazardous chemicals. The take-over will take place through an issue of shares in Cadbury's. The following information is also available: The Earnings Per Share for Cadbury's and Nestle is R2.00 and R3,50 respectively. The market value per share for Cadbury's and Nestle is R17.00 and R42.00 respectively. The number of shares in issue for Cadbury's and Nestle is 4000000 and 500000 respectively. The synergies that Cadbury's market value will benefit from are valued at R1 500000 if they merge with Nestle. Required: 1. Calculate what exchange ratio Nestle shareholders will wish to achieve if they wanted to maximize on the total benefit of the merger. (15 Marks) 2. Which defensive tactics can the management of a target company employ to avoid an unwelcome merger?" 10 Marks)