QUESTION $4(25$ Marks$)$

Moow Limited is a dairy company which is in the process of negotiating the acquisition of Barry Limited. The management

estimates that the acquisition will result in economies of scale and the additional benefits will amount to R$30000000.$

Moow $($Ltd$)$ is prepared to make a cash payment of R$55000000$ for Barry $($Ltd$).$

The following information is available for the two companies:

Moow $($Ltd$)$ Barry $($Ltd$)$

Earnings per share R$5\mathrm{.}00$ R$4\mathrm{.}00$

Number of shares $50000003000000$

Market value per share R$15\mathrm{.}00$ R$12\mathrm{.}00$

Required:

$4\mathrm{.}1$ Calculate the value of the take$-$over. $(4$ marks$)$

$4\mathrm{.}2$ Calculate the net present value of the proposed take$-$over. $(3$ marks$)$

$4\mathrm{.}3$ Calculate the take$-$over premium. $(3$ marks$)$

$4\mathrm{.}4$ Determine the market price per share after the proposed take$-$over. $(3$ marks$)$

Assume that Moow $($Ltd$)$ propose to its shareholders that they are willing to peruse a hostile takeover of Barry $($Ltd$).$

$4\mathrm{.}5$ Determine SIX $(6)$ takeover defenses that Barry $($Ltd$)$ can utilize as a tactic to resist the takeover attempts of Moow

$($Ltd$).(12$ marks$)$