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Imagine that you are the Chief Executive Officer (CEO) for Bluemotors, the largest company that specializes in producing cars in your country. Bluemotors' products are

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Imagine that you are the Chief Executive Officer (CEO) for Bluemotors, the largest company that specializes in producing cars in your country. Bluemotors' products are very popular, and the company has steady profits and cash inflows. Bluemotors has decided to acquire Whitemotors, the second largest car manufacturer. Whitemotors' shares are traded at $30 per share. There is a substantial synergy in the combination of Bluemotors and Whitemotors. Bluemotors announces that it would pay $90 per share to acquire Whitemotors' shares. Right after this announcement, the stock price of Whitemotors increases to $45 per share. Explain why the stock price of Whitemotors only increases to $45, not $90, from the perspective of the regulator. Imagine that you are the Chief Executive Officer (CEO) for Bluemotors, the largest company that specializes in producing cars in your country. Bluemotors' products are very popular, and the company has steady profits and cash inflows. Bluemotors has decided to acquire Whitemotors, the second largest car manufacturer. Whitemotors' shares are traded at $30 per share. There is a substantial synergy in the combination of Bluemotors and Whitemotors. Bluemotors announces that it would pay $90 per share to acquire Whitemotors' shares. Right after this announcement, the stock price of Whitemotors increases to $45 per share. Explain why the stock price of Whitemotors only increases to $45, not $90, from the perspective of the regulator

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