• SMM Berhad is a sport equipment manufacturer and it planning to acquire 100% Equity of Ahealth Co, a recognizable brand on producing premium sport equipment. SMM Berhad believes that the successful acquisition will create synergy savings and it can help to increase the market shares as customers have the option to migrate to SMM products. The latest relevant financial information for both companies are as follows: SMM Berhad Ahealth Co Profit after tax RM6,600,000 RM900,000 Share Capital RM5,500,000 RM600,000 RM0.50 per shares Current share price for SMM Berhad is RM6.00 per shares and it estimated Ahealth Co price to earnings ratio is 9.5% higher than SMM Berhad. The achieved create synergy saving is estimated about 35% as because it helps to eliminating duplicated administrative functions, transportation and selling the excess of non-current assets. Required: (a) Estimate and comment the gain percentage, in relation to the acquisition methods which proposed by financial controller, Method 1: Cash Offer of RM10 per share to Ahealth Co. Method 2: An offer of three SMM berhad shares for two Ahealth Co’s shares. (15 marks)