12. There has been a rumor that Company Z may become a takeover target for...
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12. There has been a rumor that Company Z may become a takeover target for another company in the industry, or even for a private equity fund in a leveraged buy-out (LBO). Here is the updated data on Company Z: Current Capitalization (Millions of EUR) Currency Million EUR Shares Price $ 95.0 Shares Outstanding 245.0 23,275.0 1,125.0 5,437.0 Market Capitalization - Cash & Short Term Investmen + Total Debt + Pref. Equity + Total Minority Interest =Total Enterprise Value (TEV 27,587.0 2,213.0 Book Value of Common Equity + Pref. Equity + Total Minority Interest + Total Debt Total book capital 5,437.0 7,650.0 a) Given the data above, what is your guess for the value of the offer that an acquirer would have to make in order to buy Company Z? (7 points) Offer Million Euros b) Discuss the following statement: this company is not a great candidate for an LBO, because its book leverage ratio is above 70%. (7 points)
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