GOIL Ghana limited which operates in the downstream of the petroleum industry in Ghana, proposes to buy BOPP Ghana limited which is in the upstream agricultural oil industry. Financial markets anticipate that if the acquisition goes through there would be cost saving to the tune of GH 5 million per year in perpetuity. The cost of capital of the merged company is expected to be 25% p.a. The announcement was made after close of business on Nov. 5, 2019. GOIL is comtemplating whether to pay cash of GH 110 million or issues 60.59 million of its shares to the shareholders of BOPP. Refer to the profile of GES Listed firms at close of business on Nov. 5, 2019 (attached) to answer the following

of GSE Listed companies at close of business on November 5, 2019. EPS GH Div. Yield % P/E Ratio 0.8876 0.1530 -1.8448 33 0.792 0.52290 n.m. n.m. r.m. 10 1.15 6.00 3 6 n.m. n.m. 22 6 2.78 3 Company Issued Market Capt. Div. per Shares (mil.1 GH e million sharo for last fin. year GH Equities ACCESS 173.95 422.69 0.0000 ADB 261.72 1.324.31 0.0000 AGA 409.71 15.159.30 0.2931 ADs in shares 0.98 39.15 0.0021 ALW 236.69 23.67 0.0000 AYRTN 215.00 17.20 0.0000 BOPP 34.80 103.01 0.0340 CAL 626.59 501.27 0.0480 CLYD 34.00 1.02 0.0000 CMLT 6.83 0.61 0.0000 CPC 2,038.07 40.76 0.0000 EGH 322.55 2,548.15 0.0000 EGL 169.72 274.95 0.0450 ETI 24,067.75 1.925.42 0.0000 FML 116.21 526.42 0.0000 GCB 265.00 1.287.90 0.3000 GGBL 307.59 538 29 0.0000 GOIL 391.86 666.17 0.0420 GSR 51.94 493.43 0.0000 MAC 9.95 59.49 0.0000 MLC 50.10 4.51 0.0000 MTNGH 12,290.47 8,603.33 0.0500 PBC 480.00 14.40 0.0000 PZC 168.00 85.52 0.0000 RBGH 851.97 468.58 0.0000 SCB 134.76 2.088.76 1.0400 SIC 195.65 21.52 0.0000 SPL 259.81 7.79 0.0000 SOGEGH 709.14 0.0400 SWL 21.83 0.0000 0.0000 TBL 200.00 TOTAL 111.87 0.1399 0.9257 TLW 0.8000 UNIL 5 1 27 5 6.173 3 2.47 -0.0803 -0.0058 0.2914 0.2881 0.0051 0.0069 -0.0155 1.3897 0.2197 0.0622 0.1655 1.1474 0.0587 0.2480 0.6100 0.4461 -0.0537 0.0737 -0.0565 -0.0080 0.0926 1.5031 0.0071 0.0032 0.1551 -0.0381 0.0339 0.4634 0.7901 -1.0427 30 7 16 13 . 0.07 n.m. 10 22 mm. .. 6 10 in 6.71 5 16 9 3 6.56 4 n.m. 12 432:58 1.09 80.00 315.48 1,373.89 16.404.24 62.50 1.043.75 4.9610 7.75 4.79 6 15 22 n.m. Adam i. 11. . iv. At what price must GOIL have closed on November 5, 2019? [2 marks] What is the present value of the potential gains to be realized if this acquisition goes through? [3 marks] What do you expect the value of the merged entity to be? [2 marks] What will be the share price of the merged entity after the acquisition is done, all things equal? [3 marks] What is the cost of the acquisition to GOIL under the cash offer? [3 marks] What is the cost to GOIL under the stock offer? [3 marks] What is the NPV of this acquisition to GOIL under the cash offer? [3 marks] What is the NPV to GOIL under the stock offer? [2 marks] By how much do you expect the shares of each company to rise under the cash offer? [4 marks] V. v1. vii. viii. 1x. of GSE Listed companies at close of business on November 5, 2019. EPS GH Div. Yield % P/E Ratio 0.8876 0.1530 -1.8448 33 0.792 0.52290 n.m. n.m. r.m. 10 1.15 6.00 3 6 n.m. n.m. 22 6 2.78 3 Company Issued Market Capt. Div. per Shares (mil.1 GH e million sharo for last fin. year GH Equities ACCESS 173.95 422.69 0.0000 ADB 261.72 1.324.31 0.0000 AGA 409.71 15.159.30 0.2931 ADs in shares 0.98 39.15 0.0021 ALW 236.69 23.67 0.0000 AYRTN 215.00 17.20 0.0000 BOPP 34.80 103.01 0.0340 CAL 626.59 501.27 0.0480 CLYD 34.00 1.02 0.0000 CMLT 6.83 0.61 0.0000 CPC 2,038.07 40.76 0.0000 EGH 322.55 2,548.15 0.0000 EGL 169.72 274.95 0.0450 ETI 24,067.75 1.925.42 0.0000 FML 116.21 526.42 0.0000 GCB 265.00 1.287.90 0.3000 GGBL 307.59 538 29 0.0000 GOIL 391.86 666.17 0.0420 GSR 51.94 493.43 0.0000 MAC 9.95 59.49 0.0000 MLC 50.10 4.51 0.0000 MTNGH 12,290.47 8,603.33 0.0500 PBC 480.00 14.40 0.0000 PZC 168.00 85.52 0.0000 RBGH 851.97 468.58 0.0000 SCB 134.76 2.088.76 1.0400 SIC 195.65 21.52 0.0000 SPL 259.81 7.79 0.0000 SOGEGH 709.14 0.0400 SWL 21.83 0.0000 0.0000 TBL 200.00 TOTAL 111.87 0.1399 0.9257 TLW 0.8000 UNIL 5 1 27 5 6.173 3 2.47 -0.0803 -0.0058 0.2914 0.2881 0.0051 0.0069 -0.0155 1.3897 0.2197 0.0622 0.1655 1.1474 0.0587 0.2480 0.6100 0.4461 -0.0537 0.0737 -0.0565 -0.0080 0.0926 1.5031 0.0071 0.0032 0.1551 -0.0381 0.0339 0.4634 0.7901 -1.0427 30 7 16 13 . 0.07 n.m. 10 22 mm. .. 6 10 in 6.71 5 16 9 3 6.56 4 n.m. 12 432:58 1.09 80.00 315.48 1,373.89 16.404.24 62.50 1.043.75 4.9610 7.75 4.79 6 15 22 n.m. Adam i. 11. . iv. At what price must GOIL have closed on November 5, 2019? [2 marks] What is the present value of the potential gains to be realized if this acquisition goes through? [3 marks] What do you expect the value of the merged entity to be? [2 marks] What will be the share price of the merged entity after the acquisition is done, all things equal? [3 marks] What is the cost of the acquisition to GOIL under the cash offer? [3 marks] What is the cost to GOIL under the stock offer? [3 marks] What is the NPV of this acquisition to GOIL under the cash offer? [3 marks] What is the NPV to GOIL under the stock offer? [2 marks] By how much do you expect the shares of each company to rise under the cash offer? [4 marks] V. v1. vii. viii. 1x