Vodacell wishes to acquire NTN cell. The takeover is a hostile takeover by Vodacell, as NTN shares have been dropping significantly due to a fraudulent contract that NTN signed up using unregistered simcards.

The take$-$over will take place through an issue of shares in Vodacell. The following information is also available:

The Earnings Per Share for Vodacell and NTN is R$4\mathrm{.}00$ and R$4,50$ respectively.

The market value per a share for Vodacell and NTN is R$12\mathrm{.}00$ and R$30\mathrm{.}00$ respectively.

The number of shares in issue for Vodacell and NTN is $5000000$ and $400000$ respectively.

The synergies that Vodacell will benefit from is valued at R$1600000$ if they merge with NTN$.$

Required:

$1.$ Calculate what exchange ratio NTN shareholders will wish to achieve if they wanted to maximize on the total benefit of the merger. $(10$ marks$)$

$2.$ Advise NTN on what remedies they can take to combat the hostile take$-$over and avoid being a predator of Vodacell.

$(5$ marks$)$