The first thing we want to do is make sure that we've got our iterations turned on and the switch so our iterations we do that by pressing alt ft or file options go to formulas and sure it's text.

And secondly goes to the model into a tab and ensure you got the search which turned on.

So in synergies versus premium paid we first need to calculate our synergies and we've got them here.

We've got our Revenue synergies costumes capex synergies as well. Fantastic.

The capex energies lead to less capex less PPE and less depreciation of that. So we end up with 15 saving there as well.

However, we did also incur the restructuring costs as part of those synergies giving us a total of 340.

However, when we have synergies which increase our profits that means we also have to pay a bit more tax.

But that tax has been calculated on all of those items. We just mentioned apart from capex.

Capital expenditure is a cash outflow, but it's not an income statement item so it won't impact our tax.

Fantastic that gets me all of the cash flows. I need to go into my free cash flow and they're just linking to the items above fantastic.

There we've got that tax.

We've now worked out the change in our cash flows because of the synergies brilliant.

Those items will need discounting in just a moment. But we're also going to need a terminal value. Now the terminal value we've used here. We've used a growth factor of 1% and a discount rate including a risk premium. That's 8% So we've used the Gordon growth model to calculate our terminal value here, which is our cash flow in the final year multiplied by one plus growth all divided by discount rate minus growth.

We can then find the present value of those cash flows the present value of the terminal value and we've discounted that by four years.

To then find a total MPV of synergies. So that's how our magic number 15,27.8 We ideally want to make sure that we don't pay a premium higher than that number.

What was the premium paid? Oh, dear. Oh dear nightmare.

The control premium paid was 16,485.

Just to check how we've calculated that you can see.

It's assumption C13 minus some assumption C11. That's the offer price minus the Standalone share price that will give you the premium per share then multiplied by the FX and then multiplied by the number of shares.

So, oh no, we've ended up with value destruction here.

If we including this as one of our metrics to decide whether the deal would be a success or not. Unfortunately the deal would fall down because of this metric.