Friday, September 13, 2019

LSE swats away $37 billion


Market watch reports (Sept, 2019) that the London Stock Exchange swats away $37 billion Hong Kong offer. I have several questions.

  1. Who decided to sway away the offer?
  2. Do the deciders benefit when they swat away the offer?
  3. Do the shareholders benefit when the deciders swat away the offer valued at $37 billion when the company's current value is $31.4 billion?
    1. Does your answer depend on the costs the firm incurs to accept the offer and the probability regulatory agencies stop it?
    2. Does your answer depend on probability that the offer spurs additional offers for other suitors?
  4. What is the best way to measure the value of the HKEX stock that makes up 3/4 of the offer: the price buyers and sellers strike in open competition or the opinion of the deciders.  

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