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:
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.
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
Using the above figures we can create an EPS tables;
Since MTU holders get 1.625 shares we need to adjust their equivalent EPS. Thus we get:
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
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.
Column 1 Column 2 Column 3 1 47.81 60.43 71.76
I have held MTU for a hold time and have no intention in selling.
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