They will offer 8.3 billion meger 0ct. 15th 1996 average 89.

7 per share

Total value – 550*(1+g)/r-g

Should be 71 per share

Talk about using multiple to estimate values.

Meaning measure is the median; mean could skew the values.

Avoid winners curse

Merger motivation

a. Leverage = debt/debt + equity

Cash or cash and stock

b. 92.5 --------- 86.78 front end loaded tender or not to tender. If tender = 89.07
prisoner dilemma non cooperative games don’t agree = worst results both agree =
lighter punishment. One agrees other doesn’t one that doesn’t gets a worse
punishment than if they both agree.

c. no talk – hostile, poison pill break up fees

consider stakeholder interest

suspend poison pill to complete the csx-conrail

agency theory – conrail and management shareholders.

exercise option – 92.5

lock-up option

acquisition price is higher than market price