INDIVIDUAL PROJECT MERGERS AND ACQUISITIONS MAF603 Kenyir Sdn Bhd is evaluating the potential merger with Chini Sdn Bhd. Relevant information is presented below: Kenyir Sdn Bhd Chini Sdn Bhd Market price per share RM22 RM11 Number of shares 30 million 10 million Neither firm has debt. The management of Kenyir Sdn Bhd recommend the issue of 6 million shares of Kenyir Sdn Bhd in exchange for 100 percent of shares of Chini Sdn Bhd. They estimate that if Chini Sdn Bhd is acquired the combined value of the two companies would be RM900 million. Required: a) Calculate the synergy from this merger. b) Determine the premium that Kenyir Son Bhd would have to pay for the acquisition based on their managers' recommendation. C) Would you advise the shareholders of Kenyir Sdn Bhd to support the merger? Why? d) If the merger occurs as planned: Calculate the price per share of Kenyir Sdn Bhd after the merger Calculate the percentage (%) of the merged firm that will be owned by the original shareholders of Kenyir Sdn Bhd e) If instead, shares are offered to the shareholders of Chini Sdn Bhd at a value equivalent to the cash offer of RM40 million, determine the NPV of the cash offer. f) Which alternative, cash or stock offer should management of Kenyir Sdn Bhd choose? Comment