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Harrods PLC has a market value of 220 million and 8 million shares outstanding. Selfridge Department Store has a market value of 69 million and
Harrods PLC has a market value of 220 million and 8 million shares outstanding. Selfridge Department Store has a market value of 69 million and 9 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods' CFO concludes that the combined firm with synergy will be worth 324 million, and Selfridge can be acquired at a premium of 21 million. If Harrods offers 13 million shares of its stock in exchange for the 9 million shares of Selfridge, what will the stock price of Harrods be after the acquisition? What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer of 80 million
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