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Mars Corp., the chocolate confectionary company, is contemplating the acquisition of Wm Wrigley Jr. Co., the gum and sweets company. The table provided shows selected
Mars Corp., the chocolate confectionary company, is contemplating the acquisition of Wm Wrigley Jr. Co., the gum and sweets company. The table provided shows selected financial information for the two companies. Mars is interested in Wrigley to broaden its product range and thereby enjoy increased economies of scope. Analysts estimate merger synergies with a present value of $5.0 billion. Mars is proposing a mixed offer for Wrigley: each Wrigley shareholder receives $48 cash for each Wrigley share tendered. How many shares of Mars does each Wrigley share get in order for both Mars and Wrigley to have the same NPV? (Assume that both companies are all equity financed.) (Please enter your answer to 4 decimal places. Do not include any signs ($, %, etc.). For percentages, your answer should look like this: #.####) Market Value of Firm, V Shares Outstanding Mars Corp. $54B 1B Wm Wrigley Jr. Co. $17.0B 0.274B Stock Price $54 Your
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