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Question 2 Sentosa Company is considering buying over Lido Company for strategic business purpose. The following information is related to the two companies as follows:
Question 2 Sentosa Company is considering buying over Lido Company for strategic business purpose. The following information is related to the two companies as follows: Number of ordinary shares issued Current market per share price 20 million shares $11 per share Sentosa Company Lido Company 6 million shares $4 per share The buying over of Lido Company by Sentosa Company is expected to lead to operational efficiencies which would have a present value of $8 million. The offer will be two shares in Sentosa Company, plus $1 in cash, for every five shares in Lido. Janice owns 5,000 shares in Lido Company. a. Required: Calculate how much will Janice's wealth increase if the buying over of Lido Company is successful? (10 marks)
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