When both firms confirmed publicly their merger talks

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Reference no: EM133674350

Wolf in cashmere LVMH case

1. The (initial) October 15 offer was for $120 in cash. However, when both firms confirmed publicly their merger talks, Tiffany's stock price rose above the $120 offer. How is this possible? Is the market reaction irrational?

2. Using the 3-day price changes associated with the Oct 28 and Nov 24 events in Exhibit 15b, determine the synergy value (in dollars) implied by the market reactions. In your judgement, is this a reasonable estimate for the expected combined gains? Why?

Hint: exhibit 11a has the number of shares outstanding as of Oct 31.

Reference no: EM133674350

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