Shareholder Value Added (SVA) Calculator

The most logical and rapid way for a company to penetrate a new market, stay competitive and get in the lead is to purchase a company, its product or services. Offering shares in replace of cash is funding more and more acquisitions today. Globalization and trade of world markets, deregulation and technology advancement is driving this activity.

Creating a synergy is a popular and common announcement a company will issue when they have declared a merger or acquisition. The anticipated profit to the acquirer from an acquisition is called shareholder value added. It is the variance between the computed value of the synergies obtained through the acquisition and the acquisition premium. The actual synergy value is an important figure that must be analyzed closely. It is merely a forecast and only a predicted figure.

Enter data into the blue fields in the calculator below:

Cash Deal  
  
Acquirer 
Shares Outstanding:
Current Stock Price:
Market Capitalization:
   
Seller  
Shares Outstanding:
Current Stock Price:
Market Capitalization:
   
Seller  
Expected Synergy Value Merger Would Create:
Offer Price:
Shares Outstanding:
Market Value of Offer:
Premium Paid:
Premium Paid (%):
 
SVA:
   
Acquirer Offers
for
each of Seller's shares.  
Share Offer Price
Market Value of Offer:
Total New Shares Outstanding:
% Acquiring Shareholders Will Own of Total New Shares:
SVA (Expected Net Gain To the Acquirer):
SVA (Expected Net Gain to the Seller's Shareholders):

The information on this page, although taken from sources believed to be reliable, does not constitute investment advice and is not guaranteed by Blue Chip Pick as to its accuracy or completeness, nor any trading result, and is intended for purposes of information and education only.

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Federal Funds Pit
Federal Funds Pit
History of Federal Funds Rate changes
LIBOR - OIS (November 11, 2008)
LIBOR is down to 2.18% a 4-year low. It reached a high of 4.81% on 10/10/08 when equities found new 52 week lows. It was about 2.81% the day Lehman filed for bankruptcy on 9/15/08. LIBOR-OIS spread may be a worry. It has fallen to 168 basis points, which compares to 87 basis points on the last trading day before Lehman declared bankruptcy, but has averaged 11 basis points in the five years before the recent financial crisis. In the last five years before January we had just completed a 4 1/2 year bull market (03-07). Alan Greenspan stated recently that the LIBOR-OIS spread should serve as a measure for determining when markets have returned to normal. 168 basis points does not seem normal to me.
FED FUNDS FUTURES (November 8, 2008)
Based upon the 30-Day Federal Funds futures contract for the December 2008 expiration is yielding an implied rate of .47% and currently pricing in a 100% chance that the FOMC will decrease the target rate by 50 basis points to .50% on 12/16/2008. The gap change between Long Term Treasury yields and the Fed Fund Rate can indicate growth direction. The gap increasing between the two rates may indicate slower growth may be near.
FED FUNDS FUTURES (October 31, 2008)
Based upon the 30-Day Federal Funds futures contract for the December 2008 expiration is yielding an implied rate of .64% and currently pricing in a 100% chance that the FOMC will decrease the target rate by 25 basis points to .75%, and a 44% chance of a 50 bps cut to .50% on 12/19/2008. The gap change between Long Term Treasury yields and the Fed Fund Rate can indicate growth direction. The gap increasing between the two rates may indicate slower growth may be near.
 

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