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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: kvogel who wrote (26700)	12/6/1997 4:48:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 61433

Karl, it all depends upon what the acquirer sees in the merger. If the acquiring company is astute, it will pay less than the present value of the incremental cash flows provided by the merged firm -- not the acquired firm. This is quite different, and frequently bears no relationship to the capitalized value of the acquired firm. So, whether $40 makes sense to the acquirer depends upon the assumptions they make concerning the prospects of the merged entity. And whether $40 makes sense to the acquired firm depends upon the assumptions they make concerning the prospects of the firm as a stand-alone company. That's why a well-structured merger is a win-win situation. Regards, Paul