The directors of Harvey Limited have appointed you as a merger and acquisition specialist. They are considering the acquisition of Spector Limited. You are to advise them whether or not to proceed with the project. The following information is available: Harvey Limited Spector Limited Market price per share 2000 cents 1600 cents Earnings per share 600cents 480cents No. of shares issued 4 000 000 1 000 000 Cash payment to Spector Limited = R24 million. Synergy benefits of R20 million will accrue through the acquisition Spector Limited have just had their assets re-valued and the valuation has appreciated quite significantly Required: 2.1 Assume the acquisition is based on earnings per share: 2.1.1 Calculate the exchange ratio based on earnings per share. 2.1.2 Calculate the total number of shares in the proposed acquisition 2.1.3 Calculate the post-acquisition earnings per share. (3 marks) (2 marks) (5 marks) 2.2 Assume the acquisition is based on market values with a cash payment: 2.2.1 Calculate the post-acquisition increase decrease price of the share (8 marks) 2.3 Consider the following information for two all-equity firms, A and B: Company A Company B Shares in issue 2 000 6 000 Price per share R40 R30 Company A estimates that the value of the synergistic benefit from acquiring Company B is R8 000. Company B has indicated that it would accept a cash purchase offer of R35 per share. Should Company A proceed? Support your