You work for a leveraged buyout firm and are evaluating a potential buyout of UnderWater Company.? UnderWater's stock price is $21 and it has 1.50 million shares outstanding. You believe that if you buy the company and replace its? management, its value will increase by 38%.
You are planning on doing a leveraged buyout of Under Water and will offer $26.25 per share for control of the company.
a. Assuming you get 50% control, what will happen to the price of? non-tendered shares, Share price will be$______?
b. Given the answer in part (a?), will shareholders tender their? shares, not tender their? shares, or be?indifferent?
c. What will your gain from the transaction? be?
Share price will be?
Given the answer in part (a?), will shareholders tender their? shares, not tender their? shares, or be? indifferent ?(Select the best choice? below.)
They will all want to tender their shares.
They will be indifferent.
They will not want to tender their shares.
What will you gain from this transaction? Gain is $______