The directors of Nico Limited have appointed you as a merger and acquisition specialist. They are considering the acquisition of Maya Limited. You are to advise them whether or not to proceed with the project.

The following information is available:

NICO LIMTED MAYA LIMITED

Market price per share	R400.00	R280.00
Earnings per share	R240.00	R120.00
No. of shares issued	2 000 000	800 000

- Cash payment to Maya Limited = R78 million.

- Synergy benefits of R30 million will accrue through the acquisition.

- Maya Limited have just had their assets re-valued and the valuation has appreciated quite significantly.

1.1 Calculate the exchange ratio based on earnings per share (3 marks)

Assume the acquisition is based on earnings per share

1.2 Calculate the post-acquisition earnings per share (7 marks)

Assume the acquisition is based on earnings per share