I see this as a poor deal for MTU shareholders and a good deal for VOC holders.
The consensus forecast for MTU and VOC for 2016, 2017 and 2018 are as follows:
Column 1
Column 2
Column 3
1
2016
2017
2018
2
$98,500,000
$115,000,000
$134,000,000
3
$57,200,000
$81,800,000
$99,700,000
MTU has 183.4 million shares and VOC currently has 231.2 million. This means that MTU holders will get 298 million new VOC shares, giving a total of 529.2 million shares.
Using the above figures we can create an EPS tables;
Column 1
Column 2
Column 3
Column 4
1
MTU
53.71
62.71
73.07
2
VOC
24.74
35.38
43.12
3
NEW
29.42
37.19
44.16
Since MTU holders get 1.625 shares we need to adjust their equivalent EPS. Thus we get:
Column 1
Column 2
Column 3
1
47.81
60.43
71.76
A shareholder of MTU will see a reduction in EPS of 11%, 3.6% and 1.8% in 2016, 2017 and 2018 while a holder of VOC will see his EPS increase by 18.9%, 5.1% and 2.4%. Only if the full $40 million in 'synergies' is experienced will a holder in MTU benefit from this deal, but a holder in VOC will still be much much better off.
I have held MTU for a hold time and have no intention in selling.
