Memstar

Memstar - Proposed arrangement between both parties is made up of an aggregate $293.4m. Cash: $73.4m- $0.0276 per Memstar share. Shares: $220.1m- UEL will issue 200.1m new shares at $1.10/share for Memstar shareholders by way of a distribution-in-specie of 10-for-1 UEL share. The deal is negative for UEL shareholders based on the 11% premium they are offering for Memstar shares, which will not boost EPS substantially. The 11% premium or $29.1m equates to $0.049 per UEL share. Based on the last closing price of $1.025, UEL should theoretically be priced at [$1.025 - $0.049] = $0.98 per share. If UEL is trading at its theoretical pricing of $0.98, Memstar's theoretical pricing should be $0.095. Based on Memstar's current price of $0.093 and UEL's current price of $0.955, Memstar shareholders potentially has a paper loss of $0.0026 loss per share. Distribution-in-specie: $0.093 * 10 = $0.93 Including cash portion = $0.93 + $0.0276 = $0.9576 $0.955 - $0.9576 = $0.0026