Relentless, I'm no pro...
and you need to seek professional advice in all matters.
Every deal is different, and the dynamics and quirks of every industry are unique. Often, general guidelines in logic beg one general question: What were the characteristics of the individual balance sheets prior to, and after the merger?
If for example, prior to the merger, Acorp. had a fabulous current ratio, great earnings per share, short dso, ideal inventory turns and levels, etc. However, Bcorp. had lousy cash flow, slow inventory turns, a bunch of bums as customers who take forever to pay their bills, have negative net worth, and no earnings with many millions of shares in float - well, just imagine the merged balance sheet. (In this case Bcorp. stock goes up and Acorp goes down.)
On the other hand, Bcorp. may have lousy management (that gets turfed after the merger), and proprietary technology that's going to cure cancer.
So there you have it. Due diligence to the nth degree is key. (And then hope you guess right.)
Regards
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