The directors of Ostrow Ltd have appointed you as a merger and acquisition specialist. They are considering the acquisition of Osbom Ltd. You are to advise them whether to proceed with the project. The following data is available: Market price per share Earnings per share No.shares issued Additional information: Cash payment to Ostrow Ltd R12 million. Ostrow Ltd Osborn Ltd R10.00 R8,00 R3,00 R2,40 2 million 0,5 million Synergy benefits of R10 million will accrue through the acquisition. Ostrow Ltd has just had its assets re-valued and the valuation has appreciated quite significantly. Required: Assume the acquisition is based on market values with a cash payment: a) Discuss the possible tax gains from a merger and acquisition. b) Calculate the combined value of the proposed acquisition c) Calculate the net present value of the proposal. d) Calculate the acquisition premium. e) Calculate the post-acquisition market price of the share. f) Calculate the post-acquisition increase/decrease price of the share. Assume the acquisition is based on earnings per share: g) Calculate the post-acquisition earnings per share. 3