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This excerpt taken from the CVS 8-K filed Feb 13, 2007. Premia Paid Analysis
Evercore reviewed the premia paid in all all-stock transactions valued at greater than $10 billion during the period from October 31, 2001 to February 9, 2007. Evercore calculated the premium per share paid by the acquirer compared to the share price of the target company prevailing one day, one week and four weeks prior to the announcement of the transaction, producing mean premia of 12.7%, 13.7% and 16.6%, respectively, and median premia of 11.0%, 14.2% and 17.2%, respectively. Evercore also reviewed the premia paid in all all-stock transactions valued at greater than $1 billion with pro forma acquirer ownership between 40% and 60% since January 1, 2000. Evercore calculated the premium per share paid by the acquirer compared to the share price of the target company prevailing one day, one week and four weeks prior to the announcement of the transaction. All transactions since January 1, 2000 result in mean premia of 19.5%, 20.5% and 20.4% respectively, and median premia of 13.4%, 11.8% and 10.7%, respectively. To evaluate a more recent trend of transaction premia paid, a separate analysis of transactions since January 1, 2001 was considered. All transactions since January 1, 2001 produce mean premia of 5.8%, 4.0% and 7.5%, respectively, and median premia of 5.8%, 5.6% and 8.5%, respectively. 10 Based on the assumptions set forth above, the premia paid analysis using a premia paid range of 0% to 20% yielded implied exchange ratios after giving effect to the payment of the Caremark special cash dividend ranging from 1.378x to 1.653x.
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