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Technology Stocks : USA/Lycos
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To: Joe E. who wrote (23)2/12/1999 11:05:00 AM
From: Joe E.  Read Replies (1) of 47
 
Correction to previous post which started "I'm gonna try...":
USAI post merger shares, I said " USAI gets 150% of what they put in, implying a $57 price."

But this didn't take into account the businesses owned by USAI shareholders not contributed. So, a better calculation would be:
USAI before deal has a market value of $12.5 Billion. USAI after deal has a market value of $9.9 billion in USA/Lycos interest plus $6 billion in other businesses, totaling $15.9 billion. This is 27% more than before the deal, so that implies a post-deal stock price for USAI of $38 times 1.27, or $48.

This presumes the deal is not restructured, and that the synergies are worth $2 billion in market value. Also, all this is just in my opinion, subject to many cautions about how little I know about this stuff.
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