Dundee $($Ltd$)$ is a dairy company which is in the process of negotiating the acquisition of

Glencoe $($Ltd$).$ The management estimates that the acquisition will result in economies of scale

and the additional benefits will amount to R$30$ million. Dundee $($Ltd$)$ is prepared to make a cash

payment of R$55$ million for Glencoe $($Ltd$).$ The following information is available for the two

companies:

Dandee ltd glencoe ltd

Earnings per share R$5\mathrm{.}00$ R$4\mathrm{.}00$

Number of shares $5$ million shares $3$ million

Market value per share R$15\mathrm{.}00$ R$12\mathrm{.}00$

Required:

$2\mathrm{.}1$ Calculate the value of the take$-$over.

$2\mathrm{.}2$ Calculate the net present value of the proposed take$-$over.

$2\mathrm{.}3$ Calculate the take$-$over premium.

$2\mathrm{.}4$ Determine the market price per share after the proposed take$-$over.

Assume that the take$-$over $($acquisition$)$ was based on earnings per share.

$2\mathrm{.}5$ Determine the exchange ratio based on earnings per share.

$2\mathrm{.}6$ Calculate the post take$-$over earnings per share.

$2\mathrm{.}7$ Calculate the benefits, if any, for both parties.