Hi guys,
I have written summary notes for the topic of M&A in level II (divided over 3 readings); here you go:
http://cfatutor.me/2013/08/02/mergers-and-acquisitions-part-i/
http://cfatutor.me/2013/08/02/mergers-and-acquisitions-part-ii/
http://cfatutor.me/2013/08/02/mergers-and-acquisitions-part-iii/
For those of you whou would like to practice questions related to these topics, I provide three Excel files that will help you in building your own problems and then confirm your answers using these sheets.
File 1: This file can be used to solve problems related to the bootstrapping effects in Mergers and Acquisitions. In particular, this file assists in calculating the number of shares the acquirer needs to issue, the post-merger EPS and the post-merger price assuming two different cases.
http://cfatutor.files.wordpress.com/2013/08/bootstrappingeffects.xlsm
File 2: This file can be used to solve problems related to the calculations of Herfindahl-Hirschman Index in Mergers and Acquisitions. The first worksheet assumes equal market share for given number of companies. The second worksheet gives the possibility for variety of market shares for 10 companies at most.
http://cfatutor.files.wordpress.com/2013/08/hhi_antitrust.xlsm
File 3: This file can be used to solve problems related to the calculations of bid evaluation in Mergers and Acquisitions. Given the method of payment (i.e. cash offer, stock offer or mixed offer), this file helps in determining the target shareholder’s gain, the acquirer gain, and the post-merger value for the acquirer.
http://cfatutor.files.wordpress.com/2013/07/bidevaluation.xlsm