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# Hughes Electronics Corp. (GMH) Message Board

• rpbossman rpbossman Feb 6, 2001 11:31 PM Flag

## 45 Billion divided by 756 million

shares = \$59 per share. Tell me what I'm missing.

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• "45 Billion divided by 756 million shares = \$59 per share. Tell me what I'm missing."

I don't think it's nearly as simple as this (dividing sales price by number of GMH shares). I think it's more like the following:

To simplify (a little), assume round numbers as follows: 800M shares of GMH currently outstanding, 500M shares of GM currently outstanding; recent average price of GMH = \$25, recent average price of GM = \$60; NewsCorp offer to GM of \$45B for purchase of all GMH "assets."

GM must first buy in all GMH shares at 20% premium, payable in GM stock.
(1.2)x(\$25) = \$30

\$30/\$60 = � share of GM (GMH shareholder receives � share of GM stock for each previous share of GMH

(� share)x800M = 400M new shares of GM now floating

\$45B divided by (500M + 400M) shares of GM = \$20 per share.

Result - the (pre-sale) GM holders receive \$20 increase value per original GM share (from \$60 to \$80), current GMH holders see \$25 value of each pre-sale GMH share increase in value to \$40 (i.e., � share of \$80 GM stock)

• there are 1,298,700 shares as of 12/31/01

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