You work for a leveraged buyout firm and are evaluating a potential buyout of UnderWater Company.? UnderWater's stock price is $ 24 and it has 2 million shares outstanding. You believe that if you buy the company and replace its? management, its value will increase by 40 %
You are planning on doing a leveraged buyout of UnderWater and will offer
$ 30.00 per share for control of the company.
a. Assuming you get 50 % control, what will happen to the price of? non-tendered shares?
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?