Question:

Zapa Berhad is considering the acquisition of Bakhtiar Berhad. The merger is expected

to give the following benefits to Zapa Berhad:

A reduction in overlapping costs of RM$600,000$ per year for an indefinite period of

time, and

An increase in the revenues of Bakhtiar Berhad of RM$900,000$ per year in

perpetuity.

Relevant information regarding the two companies is given below:

The relevant cost of capital for the companies is $15\%.$

Required:

Compute the value of the synergy from the merger.

Compute the value of Bakhtiar Berhad to Zapa Berhad.

Calculate the Net Present Value of the acquisition if Zapa Berhad offers $3$ for

every $5$ shares of Bakhtiar Berhad.

Calculate the Net Present Value of the acquisition if Zapa Berhad offers RM$14\mathrm{.}50$

cash for every shares of Bakhtiar Berhad.

Advice the management of Zapa Berhad, which method is the best to finance the

proposed merger of Bakhtiar Berhad.

Suggest any three $(3)$ defensive tactics before or pre$-$mergers talk to hinder

potential mergers and acquisitions by a potential bidder