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The market capitalization and debt of a public firm are $150 million and $350 million respectively. The firm has $5 and $15 million of minority
The market capitalization and debt of a public firm are $150 million and $350 million respectively. The firm has $5 and $15 million of minority interest and preferred stock respectively. Moreover, it has a cash position of $300 million. Explicate how a hedge fund which feels there is value in this company, can orchestrate a takeover, if it estimates it has to pay a 20% premium for the company's stock. What will the statement of financial position look like before and after the acquisition?
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