Interpretation Of Interco‚Äôs Financial Performance

Interpretation of Interco‚Äôs Financial Performance
Interpret Interco's financial performance.
Why is Interco the target of a hostile takeover?
What are your interpretations of the Board of Directors in case Exhibit 1?
As a member of Interco's board are you persuaded by the premiums paid in case Exhibit 10 or the
comparable transactions analysis in case Exhibit 11? Why?
Apr. 27 Interco (C) continued:
Compute the estimated value of Interco based on instructions in Exhibit 34. Use the 1988 sales data
in Exhibits 8 as the foundation for the sales forecast. And use the terminal multipliers in Exhibit 12
for estimating the value of Interco. See instructions in Exhibit 34, WEB.
Wasserstein, Perella & Co. established a valuation range of $68–$80 per share for Interco. Show that
this ... Show more content on Helpwriting.net ...
Because of this "undervaluation," Interco's management afraid may be a takeover target.
Action taken by Interco
Following 1987 crash, Interco's board authorized repurchase of 5 million shares (by end of fiscal
1988 over 4 million shares had been repurchased – over 10% of the equity)
7/15/88 Interco announces reorganization plan
–sell the apparel division that is dragging down rest of company
–take the money raised from this sale and return it to shareholders (via special dividend or
repurchase)
Raise of new problem
Rales Brothers: they buy undervalued companies with strong brand–names
City Capital (formed by Rales) has Interco in it sights
Thinks currently that the sum of Interco's parts exceeds Interco's current stock price
Plans to sell apparel division and also sell part of footwear division, focus on home furnishing
Offer for takeover
City Capital has accumulated 8.7% of Interco's stock
Ups the ante on 7/27/88: City Capital proposes a merger/takeover of Interco and offers to buy
Interco's stock for $64 per share (price was $44.75 on 6/30/88)
Morning of 8/8/88:Offer raised to $70 per share
Offer is timed well – Interco happens to have a Board meeting scheduled for 8/8/88.
Board wants their financial advisor,
... Get more on HelpWriting.net ...

Case Study On Mergers And Acquisitions
CHAPTER 1 INTRODUCTION 1.0 Overview of Study Mergers and Acquisitions (M&A) is a
precise significant strategic interchange to sustain in competitiveness within the global market and it
turns out to be one of a popular tools for corporate–level strategy. M&A is the amalgamation of two
corporate entities to convert into solitary legitimate entity by combining resources and capabilities
in order to attain a competitive advantage. Merger typically means reunion two particular companies
together on equivalent basic whereas acquisition ordinarily means a greater sized corporation
procuring a smaller sized corporation. The M&A activity has been continuously increased over the
last 100 years and this phenomena is described by several M&A 'waves' (refer to Table 1). Table 1:
Waves of M&A activity Name Period ... Show more content on Helpwriting.net ...
Vertical mergers. Conglomerate or diversifying mergers. Hostile takeovers, more leverage, more
going private transactions, and dominated by mixtures the medium and small sized companies.
Large M&A deals, cross–border mergers and strategic combinations. Shareholder activism, private
equity and leverage buyouts (LBO). Source: Bruner (2004) and Lipton (2006). Malik, Anuar, Khan,
and Khan (2014) further explained this different waves in mergers as first merger wave was failure
to acquire advantage from horizontal M&A activity due to mismatch transactions with exploit
established goals and objectives. The principal objective for the second merger wave intended to
move

Nandy
Poison Pill Use in the Banking Industry
Introduction
The 1980s was an era of expansive mergers and acquisitions fueled by the popularity of corporate
raids. Although this drastically changed the landscape ofmany industries, the banking industry was
relatively untouched. Commercial banks were protected from hostile takeovers by federal
regulations. The McFadden Act of 1927 and the Bank Holding Company Act of 1956 supported the
existence of 24,495 small banksl in 1985.However, by 2003 there were 11,021 small banks and 80
banks had adopted a poison pill plans (Critchfield, Davis, Davison, Gratton,Hanc, Samolyk, 2004).
The Riegle Neal Interstate Banking and Branching Efficiency ... Show more content on
Helpwriting.net ...
The Takeover Code also restricts the corporate actions of target companies during the offer period,
such as transferring assets or entering into material contracts and prohibiting issue of any authorized
but unissued securities during the offer period . Furthermore, the shareholder rights plan sanctions
the target companies to issue shares at a discount and warrants which convert to shares at a discount,
even without shareholder approval, which is illegal in the Indian context unlike the U.S. where
companies are permitted to do so. The DIP Guidelines require the minimum issue price to be
determined with reference to the market price of the shares on the date of issue or upon the date of
exercise of the option against the warrants. Such issue must also be approved by shareholders.
Without the ability to allow its shareholders to purchase discounted shares/options against warrants,
an Indian company would not be in a position to dilute the stake of the hostile acquirer and also
seeking shareholder approval in the event of a takeover attempt is a very time–consuming process,
thereby making impossible poison pills to operate within the existing Indian legal framework. Apart
from this, in the event of a takeover bid, all the directors of the target company may be removed in a
single shareholders meeting, as permitted under the Companies Act, 1956, thus making futile the
Staggered Board defence available to foreign companies.
Thus,

Conrail Case Study
Question 1 Railroading industry overview: The Railroad revolution in the United States began in the
early 1800s. The developed infrastructure was used for freight transportation business. In the mid–
1800s the industry experienced explosive growth, followed by significant consolidation in 1870.
The rail road companies initiated expansion through acquisitions in attempt to reduce marginal costs
and increase their market share. As a result of this competition, a number of cartels were formed;
therefore the federal government intervened and established regulation on railroad mergers,
infrastructure construction and divestments. On the other hand, the government initiated enormous
investments in highway infrastructure, which resulted in the ... Show more content on
Helpwriting.net ...
The combination of intermodal services (transportation of truck trailers and container by rail–car)
and network expansion would result in higher operation efficiency to compete with the trucking
industry. In addition, the maritime and the railroad presence of the merged company would result in
economies of scope. The universal container would promote better branding and it would open the
business to international trade. The industry consolidation and the merger of CSX and Conrail
would create the 2nd largest company in US and the largest in the Eastern region; therefore the
company would increase its market power in the freight transportation business, gaining revenues
from its competitors Norfolk and the trucking industry companies. The financial synergies of the
deal would lead to improved economies of scale in financing. The size of the merged firm would
increase the debt capacity and tax debt shield, therefore dilute financing costs. Although the
management of both CSX and Conrail were convinced in the success of this merger, individually the
companies were the least efficient (higher operating ratio) among the three leading railroad
companies in the East. This potential weakness could result in a concern about the management
synergies of the deal. Following the merger announcement of $8.3bn of CSX–Conrail in 1996, the
third largest railroad company in the Eastern region, Norfolk proposed a hostile offer of $9.1bn for
Conrail. The concerns of a potential

Essay about Cash Flow Analysis
1. Several factors have made Interco an attractive takeover target: 1) Interco's stock is undervalued
due to poor performance in the apparel and general merchandising divisions, which have weakened
Interco's valuation as a whole. 2) As stated by the equity analysts, Interco is an over capitalized
company with potential to grow, which makes an acquisition easy to finance. 3) Interco is also a
cash generative target for a potential acquirer as it generates approximately $0.10 of operating cash
flow for every dollar of sales. 4) The company is also structured in a way that it could be broken up
and sold into its constituent parts, which could prove to be worth more than the whole.
2. As a member of the Board of Interco, neither the ... Show more content on Helpwriting.net ...
o The projected operating margin of 6.4% is much higher than the recently declining trend of 7.3%,
5.5% and 2.5% for the last 3 years, respectively.
Footwear division's projected growth rate of 6.3% is significantly lower than the recent performance
of 19% and 34% over the last two years respectively. Also, it is projected to be the lowest of the four
divisions despite being the best performer recently.
Terminal value multiples of 14x–16x seem high. The Board should ask for additional support to
validate these assumptions
Discount rate of 10–13%. 10% seems low given the corporate bond rates and the risk free rates
given in Exhibit 14. We should also perform a Weighted Average Cost of Capital calculation based
on the desired equity return of the investors and the potential Debt/Equity ratio. A preliminary
estimate assuming a 60%/40% D/E ratio, a required equity return of 20%, a required debt return of
10% and a 41% tax rate would require a minimum discount rate of 11.5%.
4. Given the information provided, $70 seems like a reasonable offer worthy of consideration. The
$70 offer is in range based of the Wasserstein analysis and Rales has indicated its willingness to
increase the bid if supported by further due diligence. There is no reason to believe that Interco
could potentially get a higher bid given that no other suitors exist and also given the recent
performance of the stock prior to the news of the initial takeover offer.

Nina's Fashions Case Study Essay
Nina's Fashions Inc. Case Study There are 7 vital parts to completing this comprehensive analysis of
whether Nina's Fashions and their management should acquire the Chic Company. 1) Gather
information regarding mergers and present it to Nina's board of directors. 2) Discuss reasons and
factors justifying mergers, including their benefits to society and each company. 3) Discuss the Pro's
and Con's of a hostile versus friendly mergers, along with some data on how shareholders from each
side have fared in past mergers. 4) Do a sensitivity analysis of all data that was estimated and used
in the merger analysis. 5) How to start negotiations, the beginning offer, and the max price per share.
6) Try to justify buying Chic ... Show more content on Helpwriting.net ...
6. Calculate the unlevered firm value as the present value of the unlevered horizon value and the
FCFs at the unlevered cost of equity. 7. Calculate the value of the tax shields as the present value of
the tax shield horizon value and the individual tax shields. 8. Calculate Vops as the sum of the
unlevered value and the tax shield value. INPUT DATA: KEY OUTPUT: Premerger Data: Discount
rate 17.85% Beta of target 1.2 Terminal Value $15,274,752 Debt ratio of target 40.0% Acquisition
value $3,590,958 Tax rate of target 30.0% Maximum offer price $0.72 Number of shares 5,000,000
Postmerger Data: Debt ratio after merger 50.0% Tax rate after merger 40.0% Terminal growth rate
5.0% Market Data: Risk–free rate 10.0% Market risk premium 6.0% = = = = = = MODEL–
GENERATED DATA: Discount Rate Analysis: Terminal Value Analysis: Premerger beta 1.20
Terminal growth rate 5.0% Unlevered beta 0.82 Terminal value CF $15,274,752 Postmerger beta
1.31 Discount rate 17.85% Cash Flow Statements: 1993 1994 1995 1996 Net sales $4,000,000
$6,000,000 $7,500,000 $8,500,000 Cost of G.S.: 50.0% 2,000,000 3,000,000 3,750,000 4,250,000
Depreciation 400,000 450,000 500,000 550,000 Selling/admin expense 300,000 400,000 500,000

Oracle vs. Peoplesoft: a Hostile Tender Offer Analysis
Introduction
It all kicked off on 6 June 2003, when Oracle ambushed PeopleSoft with a hostile takeover bid
valued at $5.1 billion just four days after PeopleSoft agreed to a $1.8 billion deal with J.D. Edwards.
The acquisition fight lasted over 18 months and has become a staple in business and law school case
studies.
PeopleSoft specialized in Enterprise Resource Planning (ERP) software solutions. It was very strong
in human resource software and other back–office functions, competing with SAP and Siebel;
however, as the ERP space began to see dramatically reduced growth, PeopleSoft's sales began to
lag. Company leaders saw the acquisition of smaller J.D Edwards as a way to bolster and expand its
business into enterprise ... Show more content on Helpwriting.net ...
Assuming the board and management team were focused solely on building shareholder wealth, the
priorities turned on determining whether the offer was genuine, and if so, obtaining a best offer from
Oracle that clearly exceeded the forecast growth of the company as a standalone entity. In this case,
even with the mere six percent industry growth rate forecast, PeopleSoft's share price could be
expected to top $16 within a year. Clearly, Oracle's offer was not one to be taken seriously.
However, it was a point at which negotiations could begin. Given that the case review indicated that
the board believed that Oracle's bid was a valid threat, but not one that fully valued the company,
management turned to traditional antitakeover defenses to make Oracle's goal unpalatable. Tactics
included adoption of a poison pill defense and consideration of a Customer Assurance Program
(CAP). The board's strongly negative rejection of Oracle's initial offer, continued negotiations to
close the J.D. Edwards deal, and adoption of takeover defenses were designed to maintain a
consistent and profitable operation and boost stock price to so that Oracle had to raise its offer price
a lot if it wanted to acquire PeopleSoft, while incidentally maximizing shareholders' benefits.
Independent directors' Reactions and Strategies
Reaction to the hostile bid
The board established

Case Analysis: Unilever And Kraft Heinz
"AOL and Time Warner, Sanofi–Aventis and Genzyme Corp, and Nasdaq OMX/Intercontinental
Exchange and NYSE Euronext". Do these corporations ring a bell? They are, in order, the top three
most hostile takeovers of all time. The question that recently arose in the corporate governance
industry was whether Unilever and Kraft Heinz would be added to the list of hostile takeovers. With
the approval of their key investors, Warren Buffet and Jorge Lemann, the in 2015 formed merger
company Kraft Heinz offered Unilever 143 billion US dollar as an attempt to seal what could have
been the second–largest corporate deal in history. Unilever and Kraft Heinz combined would create
a food and beverage giant worth $84.8 billion, a close second to Nestle, which is worth $91.2
billion. ... Show more content on Helpwriting.net ...
Kraft Heinz has a month to make a firm and final bid before the company is obligated to surrender
and wait six months before being allowed to attempt a new takeover. Due to this rule drafted in U.K.
takeover rules and the initial decline from Unilever, it had every sign of becoming a hostile
takeover. If Kraft Heinz had not withdrawn their bid, would this have turned into a hostile takeover,
would Unilever be protected, in what way and should protection even be necessary? This essay will
focus on different methods of somewhat rather controversial strategies of protecting your company
from hostile takeovers and whether Unilever is already protected from hostile takeovers and if
protection is

M and a
Definition of 'Goodwill' An account that can be found in the assets portion of a company's balance
sheet. Goodwill can often arise when one company is purchased by another company. In an
acquisition, the amount paid for the company over book value usually accounts for the target firm's
intangible assets. Investopedia explains 'Goodwill' Goodwill is seen as an intangible asset on the
balance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically
reflects the value of intangible assets such as a strong brand name, good customer relations, good
employee relations and any patents or proprietary technology. Definition of 'Negative Goodwill' A
gain occurring when the price paid for an acquisition is ... Show more content on Helpwriting.net ...
For example, when Blockbuster started feeling the pinch from other, cheaper DVD retailers and
cable companies offering video–on–demand and easy video recording, Viacom announced plans to
split–off of its 81.5% stake in the one–time video rental giant and was even willing to absorb a $1.3
billion charge to do it. The split–off was completed in 2004. On Sept. 23, 2010, Blockbuster filed for
Chapter 11 bankruptcy protection. Definition of 'Spinoff' The creation of an independent company
through the sale or distribution of new shares of an existing business/division of a parent company.
A spinoff is a type of divestiture. Investopedia explains 'Spinoff' Businesses wishing to 'streamline'
their operations often sell less productive, or unrelated subsidiary businesses as spinoffs. The spun–
off companies are expected to be worth more as independent entities than as parts of a larger
business. Definition of 'Forward Triangular Merger' The acquisition of a target company by a
subsidiary of the purchasing company. The only difference between a forward triangular merger and
a direct merger is that a subsidiary of the purchasing company, not the purchasing company itself, is
the entity that acquires the target. Forward triangular mergers, like direct mergers and reverse
triangular mergers, can be either taxable or nontaxable, depending on how they are executed and
other

Real World Cross Border Mergers And Acquisitions
These few years, cross–border mergers and acquisitions have increased, accelerating the
globalization of manufacturing and restructuring industrial structure at the worldwide level (Kang,
N. and S, Johansson., 2000). Wal–Mart is one of the examples of real world cross–border mergers
and acquisitions; this can enlarge the market reach. Wal–Mart was founded by Sam Walton with a
single store in Rogers, Arkansas in 1962 and has grown to the world's largest retailer, its
headquarters are in Bentonville, Arkansas, United States. Wal–Mart extended its market by
acquiring the biggest local retailer Massmart at South Africa, is also operates as ASDA in the United
Kingdom and Seiyu in Japan. This increased Wal–Mart 's client base and has made Wal–Mart better
known to the world (Z, Nie., 2013).
The process of acquiring an enterprise anywhere is the world has three elements: 1), identification
and valuation of the target; 2), completion of the ownership change transaction (the tender); 3), the
management of the post–acquisition transition (Moffett, M. H., Stonehill, A. I., & Eiteman, D. K.,
2003).
First of all, the first component when acquiring new firm is the identification and valuation of the
target. This component requires a well–defined corporate strategy and focus. Identification stage of
the target market typically comes before the identification of the target firm, which highly developed
markets offer wide choice of publicly traded companies to select from. Valuation stage

Testing the Inefficient Management Hypothesis: Are United...
Auzius Kazombo Mwale
Department of Accounting & Finance
Testing the inefficient management hypothesis: Are United Kingdom mergers and acquisitions
disciplinary?
This thesis is provided in fulfilment of the requirements of the degree of Doctor of Philosophy at
The University of Stirling
May 2007
ACKNOWLEDGEMENTS
I would like to thank various people to whom I am indebted for assisting me in producing this
thesis. I am greatly indebted to Professor Robin Limmack for assisting me with the groundwork for
this study. I am greatly indebted to Dr Kevin Campbell, my principal supervisor for his continuous
support and guidance throughout the period of study.
I would to thank the Faculty of Management and the Department of Accounting and ... Show more
content on Helpwriting.net ...
3.1 CLASSIFICATION OF TAKEOVER BIDS: 41
EVALUATION OF SHARE PRICE PERFORMANCE
3.2 FREQUENCY DISTRIBUTION OF TAKEOVER BIDS RELATIVE TO CADBURY REPORT
PUBLICATION 43
4.1 SHARE PRICE PERFORMANCE OF BIDDERS AND TARGETS (MM) 76
4.2 SHARE PRICE PERFORMANCE OF SUCCESSFUL BIDS (MM) 76
4.3 SHARE PRICE PERFORMANCE OF LAPSED BIDS (MM) 77
4.4 SHARE PRICE PERFORMANCE: TOP MANAGEMENT
CHANGE(MM) 77
4.5 SHARE PRICE PERFORMANCE: NO TOP MANAGEMENT
CHANGE(MM) 78
4.6 SHARE PRICE PERFORMANCE: FRIENDLY BIDS (MM) 78
4.7 SHARE PRICE PERFORMANCE: HOSTILE BIDS (MM) 79
4.8 SHARE PRICE PERFORMANCE OF BIDDERS AND TARGETS
(MAR) 79
4.9 SHARE PRICE

Carl Icahn : A Entrepreneur
Stephanie David
11/28/15
Carl Icahn
Carl Icahn is a financier, entrepreneur, and airline executive who was born in Queens, New York on
February 16, 1936. Initially, Icahn wanted to become an opera singer. That, however, turned into
receiving a philosophy degree from Princeton University in 1957. He then attended medical school
but dropped out three years later to learn the broker's trade on Wall Street. In 1968, after learning the
broker's trade, Icahn established his own firm. Icahn & Co. was the beginning of his corporate raids.
Beginning in the 1980's, Icahn and his partners started to become enriched by taking over
companies. While doing this, Icahn supposedly made money for ordinary stockholders as well. Also
in the 1980's, Carl ... Show more content on Helpwriting.net ...
According to one of Icahn's close friends, Icahn is a very competitive person and he is very good at
terrorizing people as well as wearing down their defenses by doing so.
Icahn's way of earning money is eyeing up companies whose stock prices are trading below value
and then targets them when the market is on a downtrend. By targeting companies when the market
is on a downtrend always him to accumulate more stock. More stock is accumulated because when
everyone is selling their stocks, he is purchasing them. Once he purchases the stock, he obtains
enough of an ownership in the company to land himself a spot on the board of directors. Icahn's first
move when gaining a spot on the board of directors is to demand getting rid of the CEO. Oftentimes,
he even considers breaking up the company into different sections and selling them off separately.
Since Icahn is viewed so highly, many people begin to invest in the said company he partially owns.
It doesn't matter whether Icahn is successful or not, he is still left with healthy stock gains.
What does it mean to be ethical? Being ethical refers to doing the right thing. However, everyone
has different morals in which determines what they deem being ethical. Ethics also vary from
business to business. Acting in an ethical manner typically means that you respect yourself as well
as others, especially in the business world. In the business world being ethical is vital. You want to
have a good image for company without

Hostile Takeovers Microsoft V. Oracle
PeopleSoft v. Oracle: Hostilities Involved in a Takeover
Precious Richey
OMM 640 Business Ethics and Social Responsibility (MFF1226A)
Instructor – Ken Edick
Submitted: 7/23/2012
Abstract
The hostile takeover of PeopleSoft by Oracle was the results of a lengthy court battle that raised
many issues. One issue in particular concerned anti–trust laws and their application to technology
companies. The Department of Justice, in an attempt to block the takeover, argued that a merger of
this nature would lessen competition and ultimately limit customer choice. An appellant court judge
ruled that this case did not meet the criterion of an anti–trust breach and ruled in favor of Oracle.
Never the less, many other factors ... Show more content on Helpwriting.net ...
The hostile takeover bid came on the heels of PeopleSoft's announcement to purchase another
software company, J. D. Edwards. The planning of Oracle's announcement was seen as an attempt to
undermine this transaction (Lohr, & Flynn, 2004). The executives of PeopleSoft also argued
that the merger should not be allowed because of anti–trust laws. The Department of Justice took up
PeopleSoft's claims and filed suit to block the merger on the anti–trust argument that this merger
would "end fierce head–to–head competition that has brought customers lower prices and better
products" (Lohr, & Flynn, 2004, par. 10).
Another reason the PeopleSoft's executives rejected Oracle's takeover bid was the risk that Oracle
would discontinue PeopleSoft's products which would damage the company, stockholder value,
employees and current customers. It was speculated that the takeover would cause the dislocation of
8,000 PeopleSoft employees (Kirby, 2003). The cause of the concern was Oracle's stated position
that it was only interested in PeopleSoft's lucrative customer base and had no interest in supporting
the company's products (Lamonica, 2004).
A final reason for the takeover rejection by PeopleSoft executives related to the position that
Oracle's initial bids undervalued the company based on financial performance and market position

The Organic Foods Selection Between Ten Projects
INTRODUCTION
This case–study exanimate the Organic Foods selection between ten projects, totaled €208 million.
However, evidence suggest that the Organic sales have been static since 1990, the managers needed
to introduce more new products to expand the market presence and boost the company sales.
Although the Organic Food board of directors limited the capital budget from € 80 million. The
challenge of this case is the selection and allocation of the "scares" funds among those compelling
projects.
This paper will be divided in three section. The first section will be discussed about the possible
threat of the hostile takeover. The second part will be discussed about the financial analysis of the
projects the potential problems comes with it and it will consider the division of the projects in the
aggregate project plan. Finally, the third part will provide recommendations of the projects to select
to the Board of Directors, followed by some comments and implications in the conclusion section.
HOSTILE TAKEOVER
The potential threat of hostile takeover and the importance of 1993 for Organic Foods
A hostile takeover is a situation in purchase and sale transaction which take place against the will of
the board of directors of a purchased company (Puziak and Martyniuk, 2012). In Organic Foods, the
sales have been static since 1990, the management attribute this to the low population growth in
northern Europe and market saturation in other areas.

Computer Concepts/Computech Merger Analysis
Case 70
Computer Concepts/CompuTech
Merger Analysis
QUESTIONS
Question 1 Several factors have been proposed as providing a rationale for mergers. Among the
more prominent ones are (1) tax considerations, (2) diversification, (3) control, (4) purchase of
assets below replacement cost, and (5) synergy. From the standpoint of society, which of these
reasons are justifiable? Which are not? Why is such a question relevant to a company like
CompuTech, which is considering a specific acquisition? Explain your answers.
Answer: Synergy is by far the most socially justifiable reason for mergers. Synergy occurs when the
value of the combined enterprise exceeds the sum of the values of the pre–merger firms. (If synergy
exists, the whole is ... Show more content on Helpwriting.net ...
Merger motives that are questionable on economic grounds are diversification, purchase of assets
below replacement cost, and control. Managers often state that diversification helps to stabilize a
firm's earnings and reduces total risk, hence benefits shareholders. Stabilization of earnings is
certainly beneficial to a firm's employees, suppliers, customers, and managers. However, if a stock
investor is concerned about earnings variability, he or she can diversify more easily than the firm
can. Why should Firm A and Firm B merge to stabilize earnings when stockholders can merely
purchase both stocks and accomplish the same thing? Further, we know that well–diversified
shareholders are more concerned with a stock's market risk than with its total risk, and higher
earnings instability does not necessarily translate into higher market risk.
Sometimes a firm will be touted as a possible acquisition candidate because the replacement value
of its assets is considerably higher than the firm's market value. For example, in the early 1980s, oil
companies could acquire reserves more cheaply by buying out other oil companies than by
exploratory drilling. However, the value of an asset stems from its expected cash flow, not from its
cost. Thus, paying $1 million for a slide rule plant which would cost $2 million to build from scratch
is not much of a deal if no one uses slide rules.
In recent

Hedge Fund Activism : Corporate Policy
Hedge Fund Activism
1. Background
Shareholder activism refers to the active influence on corporate policy and practices through the use
of ownership position1. Activism can be advocated by a single minority investor, or large
institutional investors with majority stakes in the organization such as mutual funds and pension
funds2. The history of shareholder activism can be traced back 80 years ago when a court decision
sided with dissident shareholders and reinstated the special dividend that Henry Ford chose to
cancel3. Shareholder activism in the United States continues to evolve, expand, and increase in
influence since then. In the late 1980s, shareholder activism takes on a more aggressive paradigm
through engagement in hostile takeovers and leveraged–buyouts to gain control of undervalued and
underperforming companies3. In the 1990s, shareholder activism took on a less aggressive form of
activism – favoring abstentions and withholding votes for essential proxy issues – to advocate
operational, financial, and governance reforms in a company. The implications from the early
landscape of shareholder activism, however, has largely been inconclusive since the period was
plagued by many regulatory and structural barriers such as free–rider problems, and conflict of
interest4.
In recent years, hedge fund activists have been growing in prominence around the world as a new
breed of shareholder activists and the latest form of corporate governance mechanism. Hedge fund
activists

Finance Management Overview Essay examples
CHAPTER 1
AN OVERVIEW OF FINANCIAL MANAGEMENT
Forms of business organization Answer: c
[i]. Which of the following could explain why a business might choose to organize as a corporation
rather than as a sole proprietorship or a partnership?
a. Corporations generally face fewer regulations. b. Corporations generally face lower taxes. c.
Corporations generally find it easier to raise capital. d. Corporations enjoy unlimited liability. e.
Statements c and d are correct.
Firm organization Answer: a
[ii]. Which of the following statements is most correct?
a. One advantage of forming a corporation is that you have limited liability. b. Corporations face
fewer regulations than ... Show more content on Helpwriting.net ...
Corporations and partnerships have an advantage over proprietorships because a sole proprietor is
subject to unlimited liability, but investors in the other types of businesses are not. e. Firms in highly
competitive industries find it easier to exercise "social responsibility" than do firms in oligopolistic
industries.
Miscellaneous concepts Answer: e
[x]. Which of the following statements is most correct?
a. One advantage of organizing your business as a corporation is that your shareholders are not
subject to limited liability. b. Restrictive covenants in debt agreements are an effective way to
reduce agency conflicts between stockholders and managers. c. Managers generally welcome hostile
takeovers since they often increase the company's stock price. d. Statements a and b are correct. e.
None of the answers above is correct.
Partnership form Answer: d
[xi]. Which of the following statements is most correct?

a. In a partnership, liability for other partners' misdeeds is limited to the amount a particular partner
has invested in the business. b. Partnerships must be formed according to specific rules that include
the filing of a formal written agreement with state authorities where the partnership does business. c.
A fast–growth company would be more likely to set up a partnership for its business organization
than would a slow–growth company. d. Partnerships have

Boeing Pros And Cons
When analyzing investment decisions, we did not consider in any detail the largest investment
decisions that most firms make, i.e., their acquisitions of other firms. Boeing's largest investment of
the last decade was not a new commercial aircraft but its acquisition of McDonnell Douglas in 1996.
At the time of the acquisition, Boeing's managers were optimistic about the merger, claiming that it
would create substantial value for the stockholders of both firms. What are the principles that govern
acquisitions? Should they be judged differently from other investments?
Firms are acquired for a number of reasons. In the 1960s and 1970s, firms such as Gulf and Western
and ITT built themselves into conglomerates by acquiring firms in other lines of business. In the
1980s, corporate giants like Time, Beatrice and RJR Nabisco were acquired by other ... Show more
This was the case, for instance, with the leveraged buyouts of firms such as RJR Nabisco in the
1980s. Figure 26.1 summarizes the various transactions and the consequences for the target firm.
Another firm
Merger
Consolidation
Tender offer
Acquisition of assets
Buyout
Target firm becomes part of acquiring firm; stockholder approval needed from both firms
Target firm and acquiring firm become new firm; stockholder approval needed from both firms.
Target firm continues to exist, as long as there are dissident stockholders holding out. Successful
tender offers ultimately become mergers. No shareholder approval is needed.
Target firm remains as a shell company, but its assets are transferred to the acquiring firm.
Ultimately, target firm is liquidated.
Target firm continues to exist, but as a private business. It is usually accomplished with a tender
offer.
Figure 26.1: Classification of Acquisitions
3
A firm can be acquired by its own managers and outside investors The Process of an

Advantages And Disadvantages Of Golden Parachutes
Golden parachutes" get a lot of press, and they always sound like elite packages for high–level
executives. Very few people get them, and very few people know how they work.
Companies usually reserve them for executives at the top of the organization chart, and these
contracts establish an agreed–upon compensation package that the employee would immediately
receive upon termination. The benefits package usually includes a list of specific terms that explain
what the terminated employee will receive.
How a Golden Parachute Works
When someone is offered an executive position at a firm, the contract will often include a golden
parachute clause. This clause states the amount of severance pay, stock options, and cash bonuses
that he or she would ... Show more content on Helpwriting.net ...
Expose the fact that executives may not be objective in the event of a takeover. During a merger or
any other agreement that may affect a company's future, an executive has a sworn duty to look after
the company's best interests. Critics argue that they shouldn't need a golden parachute to remain
objective during this process.
5. May not necessarily discourage hostile takeovers. Golden parachutes make up a small percentage
of the cost of a merger. In the scheme of things, they're not a major inhibiting factor when it comes
to preventing hostile takeovers.
Classic Examples of Golden Parachutes
There are a number of famous cases involving the use of golden parachutes. Many of these cases
have fueled outrage on the part of investors, the general public, and in some cases, law enforcement.
Some of the most noteworthy cases include:
Tony Hayward of British Petroleum
Tony Hayward was the CEO of British Petroleum (BP) during one of the most infamous oil spills in
history. He was subsequently fired for poor leadership, but he left with a severance package of over
$1 million (the same amount he'd make in a year) and a pension close to $12 million. This
agreement created headlines such as "$12M Payoff for Captain

To what extent is diversification the best strategy to...
Novartis, a large multinational pharmaceutical company, recently diversified by buying Alcon, in a
£24.8bn deal. Alcon is a producer of eye care products such as contact lenses. Google has
diversified by investing £124m in a wind power business. To what extent is diversification the best
strategy to achieve profitable growth? Justify your answer with reference to Novartis, Google and/
or other organisations that you know. (40 marks)
Diversification – Practice under which a firm enters an industry or market different from its core
business.
Growth – The process of improving some measure of an enterprise's success. Business growth can
be achieved either by boosting the top line or revenue of the business with greater product sales or ...
Show more content on Helpwriting.net ...
For example In 2004 Branson was set to enter the music industry once again by diversifying into the
online music industry through an online music store service just like Apple. He also released his
own mp3 called the 'Pulse' that was to rival Apple's Ipod. Unfortunately he closed both products
later that year due to the fact that Apple kept releasing new products that made the 'Pulse' outdated
with Apple's high brand awareness, Virgin found it difficult to rival a large market leader therefore
caused them to retrench and withdraw their product. This shows that although diversifications seem
the best strategy for profitable growth, it does pose many risks especially when entering new
unfamiliar markets.
On the other hand there are also many other strategies that can achieve profitable growth such as a
takeover or a merger. Orange and T–Mobile were two mobile phone companies that had nearly
reached the end of their product life cycle in 2008 due to the rising popularity of other networks
offering new USP's such as 3's unlimited internet and Vodaphones 'freebees' perks. However with
the equal merger of the two companies in 2010 and performing under the new refurbished name that
is EE (everything everywhere), it is now the largest mobile network operator in the UK, with around
28 million customers. The synergy between these two companies has not only increased

Poison Pills
[1] Please descirbe the purpose of First–Generation Poison Pills; Second– Generation Poision Pills
and Third Gereration Posion Pills.
[2] Impact of Poision Pills on Stock Prices.
[3] List the Preliminary Takeover Steps: a) Bidding Strategies b) Casual Pass c) Bear Hugs
[4] What is Tender Offers
Throughout the years many acquisitions have been hostile, which has led to companies to creative
preventative and defensive takeover methods. Preventative is used as a way to reduce the likelihood
of a takeover, and defensive measure (active measures) are used afer a hostile bid has been issued.
Keeping the company successful with shares at a high cost prevents short–term gain ... Show more
Another method is the White Knight, which is when the company doesn't want the acquiring
company to takeover, they find a more suitable company to acquire them instead. This may be done
to prevent the disassembly of the target. Takeover tactics have been used throughout history. Three
important tactics are Bidding strategies, Casual pass, and Bear hugs. Bidding strategy is 2/3
successful to the 1st bidder. Bidders have to watch out for not only the target company, but also for
other bidders. There has been a higher successrate on bidders who actually contact the target
company first in hopes of a more amiable bid. A second bid can be even more successful, therefore
the first bidder shouldn't offer too much to prepare for a comeback bid. This is called Optimal
Bidder. Casual pass is an informal overture before bidding . The problem with this is that it gives the
target advance warning of the possible takeover. Bearhugs apply pressure to the target before
bidding. The acquirer contact the Board of directors and state that they will go to the stockholders
and present an offer to them without the Board's consent. This forces the target to take a public
position and puts pressure on the Board because it must consider the offers or they violate fiduciary
duties. Tender offers have been debateable over the years. There is no specific definistion as to what

The Pros And Cons Of Imperialism
Beginning around late 1890s America had begun to develop into an empire. There were serval
reasons to pursue an empire but it mainly boiled down to economic and social reasons. United States
Naval officer Alfred T. Mahan spoke about how no nation can prosper without a large fleet of ships
engaging in trade and a large navy to protect such a fleet. However there is no new frontiers as most
of the land accost the world has been conquered or is occupied by another nation. Therefore
expansion will have to take place at the cost of other civilizations and groups of people. However a
sizable portion of the population may be against expansion if it is shown in the light of murdering
innocent people and betraying leaders. So a new approach was taken to justify imperialism and it
hinged on racist ideology. Propaganda was made that showed that the takeover was beneficial to the
inhabitants of those nations. Most of these nations were not developed and pro–expansion
propaganda claimed that as a prosperous nation (the United States) it is our duty to civilize and
modernize the world. These claimed leveraged the racist ideology of the time by painting the white
man as developed and futuristic while the natives of other territories as backward savages. Such
propaganda also stated it was important to spread Christianity around the world to save the innocent
souls of the savages. Even though this ideology was rooted in racist ideals it morally justified the
conquering of other nations to even the kindest of uninformed souls, and soon the nation was on its
way to become an empire. First Hawaii was tricked into trading then a short but hostile takeover.
Later the Spanish war began but quickly ended with now Cuba and the Philippines under American
rule. In this conflict the Philippines agreed to help the United States with the goal of removing
themselves from empire rule. However the United States turned back and now rules over the
Philippines. These battles were obviously not blood free and innocent people from Spain and Cuba
died for the economic interests of America.
The progressive area which extended from 1900 to 1916 was a period of massive social changes.
The progressives can be loosely defined as people whom believe

Group 5 Final Paper Free Range v4
Free Range: A Case for International Operations
Group 5
Katherine Stone, Michael Williams, Shawn Williams, Horace L. Wynn, Scott Terry
AMBA 610 UMUC
Part A: Potential Advantages and Shortfalls of Various Globalization Strategies
Globalization strategies have been an issue for any organization that intends to increase its
international presence. Free Range Foods has decided to grow operations in France, the United
Kingdom, and other regions throughout the globe. The recommended strategies Free Range Foods
should consider utilizing in order to strengthen its position in the international market are 1) Merger
and Acquisition/ Takeover and 2) Strategic Alliances. Both strategies are effective in obtaining an
entry into the ... Show more content on Helpwriting.net ...
Producing and maintaining a product is hard enough domestically and is only further compounded
with the addition of taking further components into consideration.
A major factor that Free Range needs to consider is how they will like to set up their international
organization. According to Jones (2013), a multidomestic strategy is defined as one which haswhen
you have a corporateion headquarters and establishesdevelop divisions in each country or region
where ityou would like to do business in. Authority in these divisions would be given to the
managers located in eachthere. The divisions would develop and market products in a way that
focuses on the region of the globe they are locatedin (Jones, 2013, p. 464). This is important to
consider because what Americans want out of a product can be very different than what Europeans
expect out of a product. For example, there are many different types of cheeses available in Europe
that are not available in America, so it would be important to understand the culture and
expectations of consumers in the country/region where a company doesyou are doing business in.
The Multidomestic approach will allow you to form your products to satisfy the needs and wants of
the consumers in that area.
One of the primary factors to consider is the cost of establishing the business in a foreign market.
France maintains market for organic products but the products are sold at a much higher rate than
traditionally farmed

Negative Impacts Of The Kraft Foods 2010 Takeover Of Cadbury
Negative Impact
Some economists are of the opinion that when foreign companies buy native companies they take
the jobs out of Britain, pay less tax and are less accountable. They also believe that there is a great
difference between being the director of a company and being a divisional manager irrespective of
how large the division maybe.
Many developing nations are trying to resist foreign ownership of their companies because of
nationalist sentiments and fear of foreign political and economic influence. They fear that it will
leave their resources more vulnerable to exploitation by the foreign companies.
Though the foreign ownership brings in excessive and consistent investments we cannot deny the
fact that it takes the ownership of important know– how ... Show more content on Helpwriting.net ...
Evidence of the negative impact of foreign ownership.
The Kraft foods 2010 takeover of Cadbury can be definitely taken as an example to highlight the
negative impact of foreign ownership of British businesses.
Cadbury was bought by Kraft in 2010 and is now a part of Mondelēz International, a US company.
It will be fair to call it a messy deal and it left a bitter taste in many mouths. This takeover was
clearly seen as an attempt to achieve the short– term gains of the shareholders and managers.
Despite previous assurances the merger was followed by the closure of the Somerdale plant in
Bristol leading to several hundred job losses. Kraft also moved the corporate Headquarter of
Cadbury's to Switzerland, thus taking the tax money out of UK. This merger was seen as an act of
bad faith and many suggested that takeovers like these which threatened British jobs and economy
should be banned.
The Kraft – Cadbury fiasco has made Britain cautious and wary of such hostile takeovers. A hostile
takeover is defined as the merger or acquisition carried out against the wishes of the management of
the target

Case Study : ' Original Altruistic Spirit ' Destroyed...
Was Cadburys "original altruistic spirit" destroyed after Kraft purchased the company?
Financialization has been taking place since the 1980s (Froud et al., 2006) and involves interaction
of financial intermediaries with management consultants to generate shareholder value (Jensen
1988). Shareholder value can be increased by making a firm more efficient for example cutting costs
and boosting profitability. Kraft took over Cadbury in January 2010 after Cadbury Chairman Roger
Carr accepted a £11.9 billion bid worth 850p per share. Cadbury, founded in 1831 (Cadbury 1999),
was operated under strict Quaker values placing emphasis on employee welfare and product
innovation leading to a product and altruistic spirit within the firm. Financialization resulted in the
market for corporate control (Jenson 1988), which gives empowerment to the shareholders, and
ultimately opened the door for Kraft's takeover of Cadbury. In this essay I will discuss the existence
of Cadburys altruistic spirit when the firm was taken over and the factors which caused the takeover
relating to shareholder values. I believe that the takeover didn't result in the destruction of the
altruistic spirit because financialization and share value have been diminishing this spirit before
Kraft took over Cadbury in 2010. To reach this conclusion I will firstly show how shareholder
values outweigh an ethical business culture when firms are influenced by the capital market. I will
follow this up analysis of how Cadbury

Company Analysis : Usg Corporation
USG Corporation is a consolidation of thirty–five gypsum companies, dominated the highly
competitive and price–sensitive gypsum with the lion share of 50% of the market. USG through its
subsidiaries manufactured and distributed the building materials for residential construction (36% of
sales), nonresidential construction (29% of sales), building repair & remodeling (25% of sales) and
finally the industrial processes (10% of sales). USG operates under four major divisions, Gypsum,
Interior Systems, Wood fiber and other products. All these divisions are strongly positioned in their
respective market places typically first or second, excel in technology, design & innovations,
extremely efficient operation with multiple geographically dispersed plant location and were highly
integrated. Over a period of time, it grew steadily with vertical integration, expanding existing
businesses and acquiring new businesses. They were able to keep the production cost low primarily
due to economy of scale & size of the company. From the case exhibit 2, the company had a stellar
performance from 1983 to 1987. As an industry leader in construction industry, their net annual
sales increased significantly from 1.6B in 1983 to 2.9B in 1987 about 81% growth in 4 years. Their
operating income before tax (EBIT) had a steady growth from 1983 except a dip in 1987 mainly due
to changes in the overall industry primarily contributed by increased in cost. At the same time, the
return on equity at end of

Case Questions Essay
Case Questions.
A. Williams, 2002.
1. Evaluate the terms of the proposed $900 million financing from the perspective of both parties.
How would you calculate the return to investors in this transaction? If you need more information,
what information do you need?
2. What is the purpose of each of the terms of the proposed financing?
3. Conduct an analysis of Williams' sources and uses of funds during the first half of 2002. How do
you expect these numbers to evolve over the second half of 2002? What is the problem facing
Williams? How did it get into this situation? How has it tried to address the problem it is facing?
4. Some might describe Williams as "financially distressed". What evidence is there that ... Show
more content on Helpwriting.net ...
As a USX shareholder, how credible a spokesperson do you consider Icahn to be on this issue?
3. What restructuring option – Icahn's spin–off proposal or the company's targeted stock proposal –
will create the most value for shareholders? For creditors? For the firm's other stakeholders?
4. For what kind of companies is targeted stock most appropriate? Least appropriate?
5. Should the company seriously consider any other options besides doing a spin–off or issuing
targeted stock?
6. If the company decides to go ahead with the targeted stock issue, what specific provisions or
features should the stock include to ensure maximum value creation? How closely would you model
USX's targeted stock on GM's alphabet stock?
D. Interco.
1. Assess Interco's financial performance. Why is the company a target of a hostile takeover
attempt?

2. As a member of Interco's board, are you persuaded by the premiums paid analysis (Exhibit 10)
and the comparable transactions analysis (Exhibit 11)? Why?
3. Wasserstein, Perella & Co. established a valuation range of $68–$80 per common share for
Interco. Show that this valuation range can follow from the assumptions described in the discounted
cash flow analysis section of Exhibit 12. As a member of Interco's board, which assumptions would
you have questioned? Why?
4. How would you advise

Mba 570 Complete Course
MBA 570 Complete Course – Saint (Assignments– Dqs – quizzes)
IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download
http://acehomework.com/MBA–570–Complete–Course–Saint–5555500012.htm?categoryId=–1 If
You Face Any Problem E– Mail Us At JohnMate1122@gmail.com
MBA 570 assignment 1
This writing assignment should be in an essay format. It should use twoor more published news or
academic articles which are less than a year old as cited references. In your essay, you should
answer the following questions:
What are value stocks?
What are growth stocks?
What is the reasoning that investorsuse for purchasing valueor growth stocks?
Has valueor growthinvesting worked best over the long term?
... Show more content on Helpwriting.net ...
The old factory needs extensive renovation which will still not leave it as efficient as the new
factories planned for the new countries. Therefore, the NPV of the capital investments involved are
equal for all three countries.
You have calculated the NPV of each choice. The NPV of keeping the U.S. factory open is
$1,000,000. The NPV of moving the factory to Canada or Ireland is $10,000,000 and $35,000,000
respectively.
In this writing assignment, you should answer the following questions:
? Where should your factory be located? Why?
? Who are the stakeholders in this decision? How did you take the stakeholders into account when
making your decision?
? How does your decision support responsible stewardship and integrity in the context of financial
management?
The essay will be in APA format and be 500–1,000 words in length (this range includes everything
in the assignment including your name, title, and citations). Turnitin.com software will be used to
ensure that submitted assignment

Mba570 all discussions Module 1 Discussion
This discussion question for this module has two parts. Respond to both parts to receive full credit
for this assignment.
Part 1:What is a hostile takeover and what generally happens to the stock price of the firm being
acquired in a hostile takeover?
Part 2:How does a hostile takeover

Types Of Financial Resources : Shareholders And Debt Holders
Nowadays, although 71% of firms are sole proprietorships, only 5% of revenue is derived from
them. In fact, 84% of revenues are derived from Corporations (Berk and DeMarzo, 2014; Figure
1.1). Corporations are firms owned by multiple owners called shareholders (Berk and DeMarzo,
2014) but run by managers who make decisions on their behalf. Therefore, a problem arises from
the separation between "ownership" and "control" (Jensen and Smith, 1985), the agency problem.
Firms have two types of financial resources: shareholders and debt holders, each type has a different
concern. While shareholders are wealth maximisation focused, debt holders are concerned with the
ability of the firm of paying them back – with an agreed–upon interest rate. As ... Show more
Then we will discuss the possible consequences of these agency problems; and therefore whether
efficient solutions to these problems exist. To begin with, the agency problems exist because of the
separation of ownership and control (Berk and DeMarzo, 2014). This separation leads to serious
conflicts of interest: a player act based on its own interests at the expense of others ' (Jerzemowska,
2006). Jensen and Smith agree that there are two types of conflicts of interest: between shareholders
and managers on one hand and between debt holders and shareholders on the other hand. Why,
instead of align their interests to make the firm better off, each party try to act for its own interests?
First, we deal with the conflict of interest between managers and shareholders. As we said
previously the manager 's role is to increase shareholders ' wealth through his decisions. When a
good decision is aligned with shareholders ' interests, they are better off. Berk and DeMarzo (2014)
take as example Apple shares which are worth 60 times more than in 2001, thanks to the launch of
the first iPod. By means of the managers ' decision of Apple in 2001, shareholders increased their
wealth. Despite this willing to take good decisions for the shareholders ' interests, managers tend to
act differently. For instance, Wal–Mart Stores in 2010 gave million dollars to charity, which
decreased shares ' value. Despite this ethical decision, most shareholders did not feel that it was in

Swot Analysis : New Jersey Cts
1. The company I 've chosen for my midterm is Cognizant Technological solutions which is an
American multinational company based in the IT industry that provides customized IT services,
BPO ( Business process Outsourcing) and IT consulting services worldwide. Headquartered in
Teaneck, New Jersey CTS ( abbreviated form ) was founded on January 26th 1994 as a technology
unit of Dun and Bradstreet , an American public company and in 1996 the latter company spun off
CTS .Cognizant takes its position in the NASDAQ–100 and the S&P ( Standard & Poor 's ) 500
Indices list. Initially focussing on mostly providing IT solutions ,CTS eventually began venturing
into application development, intricate systems integration and IT consulting. ... Show more content
on Helpwriting.net ...
Talking about the structure of cognizant , it has around 350,000 in excess of employees in all and
has uprooted several development centres of the company all over the world divided into vertical
and horizontal sections. The vertical unit comprises of Healthcare, Retail, Banking services while
the horizontal unit focuses on mobile computing, testing and BPO. From the annual reports of
previous years ,it can be seen that the major revenue is reaped mainly from Financial companies and
healthcare industries , especially the latter in the recent years. Cognizant showed revenues of $178
million in 2001 and $229 million in 2002 and in 2003 topped $350 million. Since then Cognizant
has been unstoppable showing increasing trends in the coming years duly breaking several records.
As of 2014 CTS amassed a whopping ROI of US$ 10.26 billion. CTS has managed to keep the
margin relatively stable, in spite of locking horns with bigger and more established and renowned
companies in the computer services department. The Operating Margin has been in the 18%–20%
range, on the other hand the Net Margin has ranged between 14%–17%. Some of the key
competitors of Cognizant are Infosys, Wipro, Accenture, TCS to name a few. Post split off from IMS
in 2003 CTS board spontaneously instituted the poison pill provision ( a stratagem used my many
companies to flinch hostile takeovers) which prohibited hostile

Who benefits from take over resistance tactics? Essay
Who benefits from take over resistance tactics?
According to the finance literature, a takeover is a process whereby a firm acquires another firm,
resulting in a change of the controlling interest of the acquired firm. Takeovers can occur through
acquisitions, proxy contests and going–private transactions. They can be friendly when the
management of the target firm is receptive to the bidder offer or they can be hostile when target firm
managers resist takeover attempts by using defensive tactics. According to Ross et al (2010),
takeovers can result in change of firm policies, layoffs, terminations, or overhaul of business
operations.
To analyze who benefits from a takeover resistance tactic, we should first examine the reasons or ...
Show more content on Helpwriting.net ...
Other tactics after the company in in play include greenmail and standstill agreement, white knight
and white squire, recapitalization and repurchases where managers issue debt to repurchase shares
raising the market share price, making it less attractive to the bidder; exclusionary self–tenders and
asset restructuring.
These tactics are built by management for self–protection reasons, being severe, (blocking
takeovers) or soft tactics with no substantial impact on the offer price. However, empirical evidence
shows that although manager's defensive tactics may sometime rarely shareholders by increasing
wealth, in general, these tactics do not have a positive impact in the share price of the target firm.
According to DeAnglelo and Rice (1983) cited in Ruback (1987.p56–57), they found no evidence of
share price reaction to adoption of corporate charters amendment when analyzing 53 firms using
staggered boards as well as the effect of super majority provision.
Ho (1986) cited in Ruback (1987), found no evidence of existence of abnormal return for a sample
of 23 poison pills. This conclusion is also consistent with findings of Kidder, Peabody and Company
for a sample of 167 poison pills where no stock price change was observed.

The Rosneft 's Takeover Tnk Bp
Introduction
This research is going to investigate the Rosneft's takeover TNK–BP in 2013. The main focus of the
essay is the effect of the acquisition on HRM of the new company and the emphasize of the
important change management strategy to unite employees from 2 companies under goal with
shared beliefs and minimize the cultural clashes between employees from different organizations.
"Most research indicates that M&A activity has an overall success rate of about 50%–basically a
coin toss." (Robert Sher). A research needs to be carried out to minimize the possibility of failure of
the takeover. The investment of 35 billion pounds should be guaranteed with more success rather
than 50/50. The change management strategy should be used ... Show more content on
Helpwriting.net ...
Employees are experiencing discomfort as they haven 't get used to the new culture yet (Secondary
Research).
Background Information/Body
Before the takeover Rosneft was owned by government and it was the largest oil company in Russia.
The cost of the acquisition was $55bn. This takeover is one of the most expensive in the world.
Rosneft controlled 25% of the market and the marketshare is keep growing."Rosneft has taken over
TNK–BP in a $55bn (£36bn) deal that will make the Russian state–owned oil company by far the
world 's largest listed oil producer." (http://www.theguardian.com/business/2013/mar/21/rosneft–
takes–over–tnk–bp). Founded in 1995 Rosneft became the major oil extracting company in RF.
TNK–BP is a joint venture which was formed by two companies TNK(Tyumenskaya Neftyanaya
Kompaniya, Tyumen Oil Company) and BP (British Petrolium). TNK on its own was growing
rapidly and the company was gaining market share each year. After the joint venture with BP the
growth didn 't go as it planned to be. The fundamental disagreements in the objectives of the 2 sides
prevented the successful development. Both companies owned 50% of shares and to make a
decision it was required to have an agreement of both sides. "BP view TNK–BP as a Russian
subsidiary, TNK–BP view it an oil company with global ambitions. The latter implied it would be a
competitor to BP."

Friendly Takeover
Introduction
This is a research assignment regarding the analysis of a friendly takeover example and a hostile
takeover example in the year 2010 to 2011. As for the friendly takeover acquisition, it is still in
process with a vertical business combination of building materials supper and peat moss distributor.
As for the hostile takeover acquisition, this is a Horizontal Business Combination of two mineral
mining companies.
Friendly Takeover Example –Vertical business combination
IKO Enterprises Ltd. acquiring Sun Gro Horticulture Inc.
Company Background
Acquirer – IKO Enterprises Ltd.
IKO is a global leader in the manufacture and supply of asphaltic and bituminous waterproofing
products. Group head quarters are in Alberta, Canada, ... Show more content on Helpwriting.net ...
to pursue a plan of arrangement of acquisition.
Expected Benefits in Acquisition
New Pacific Metals Corp. seeks to control Tagish Lake Gold Corp. and managed the subsidiary for
this hostile takeover bid. New Pacific has completed the acquisition of a 100% interest in Tagish
Lake Gold Corp. and it will operate as a wholly owned subsidiary of New Pacific., and will share its
main asset which "comprises 982 mining claims covering a 178 square kilometer area located
approximately 80 kilometers by road south of Whitehorse, Yukon Territory, Canada."
Result and Actual Benefits Received after Acquisition
After acquiring Tagish Lake Gold Corp., New Pacific share price went up from $1.63 per share to
$2.15 per share (Feb. 11th 2011). New Pacific now has rights to develop Tagish Lake's Skukum
Gold Project to production while carrying out exploration on the project to grow its resource.
Conclusion
After finished this research project of friendly and hostile takeover cases, I found out that most
hostile takeover cases had difficulty in negotiating prices with acquires. New pacific Metals Corp.
and Tagish Lake Gold Corp. is a example. After the acquirer offering a fairly high price, they still
got strongly rejected from acquiree. By the time the acquiree's stock price is likely to rise after the
announcement of the hostile takeover. I think it is because there was more attractive to investors to
hold

Cadbury Takeover
Case Study: Cadbury Takeover
Introduction:
In the beginning of 2010 the US food giant took–over one of the most famous British confectionary
companies, Cadbury, affectively making Kraft the largest food confectionary company in the world
(Smith, 2010). According to Rigby and Masters (2010) the takeover "was one of the biggest – and
most hotly contested – acquisitions in the UK". The process was exhaustively followed by media,
which criticized inability of British Government to limit takeovers of such famed British brands in
the future – as it is part of the British identity. Moreover, during such process a large number of
employees have suffered, not only through a large number of redundancies, but also through the
change in management ... Show more content on Helpwriting.net ...
According to Lawrence Hrebiniak: "Kraft ... has scared off Cadbury employees by trying to make
their decentralized culture fit the US company's highly structured approach" (Lucas and Rappeport,
2011). For Cadbury's employees this meant increased uncertainty about their future employment
overall, as well as structure of the internal relationships and management style, especially as a result
of a closure of a number of factories as well as mass redundancies (Stiff and Ralph, 2011).
Employees on the lower level of the hierarchy had to get used to new structure of the company,
which meant that many of them have to report to different managers than previously. On top of that,
due to the merger, employees of two different companies now have to work side–by–side, and
considering that employees of Kraft feel "they should be dominant" (Lucas, 2011), it can reflect
negatively on the relationship between employees not only vertically on the hierarchy, but also
horizontally. Of course, relationships are not changing only for Cadbury's employees, Kraft workers
are also directly affected (Lucas, 2011), as takeover involved changes for them also – including
closure of Kraft factories and redundancies of Kraft's employees (Stiff and Ralph, 2011).
The takeover had also impact on the employees higher up on the hierarchy. As mentioned by one of

Wk1 Final Paper
Wk1 DQs What is meant by an "agency cost" or "agency problem"? Do these interfere with
shareholder wealth maximization? Why? What mechanisms minimize these costs/problems? Are
executive compensation contracts effective in mitigating these costs/problems? Our textbook defines
an agency problem as a "conflict between the goals of a firm's owners and its managers"
(Megginson & Smart, 2009). It then defines agency costs as dollar costs that arise because of this
conflict. In the corporate structure, stockholders are the owners of the firm, and they elect a board of
directors to oversee the firm and help protect their investment. The board then hires the right
corporate managers to run the firm with the goal of maximizing the wealth of the ... Show more
Generally, under–performing companies are the prime targets of hostile takeovers, so it makes sense
that aligning shareholder and executive goals is a major way to avoid that. One popular way of
aligning these goals is through the use of elaborate, structured compensation plans for executives
which directly tie an executive's salary to the performance of the company, usually and specifically
its stock price (Megginson & Smart, 2009). These compensation plans have become the norm for
American corporations, and their effectiveness in solving the agency problem is debatable. On one
hand, it should drive an executive to strive to maximize the shareholder wealth, and it also helps
companies to attract and retain the best available managers. On the other hand, it serves to
sometimes wildly inflate the compensation paid to these executives, either by corporations trying to
stay competitive for the best talent, or through easily achievable goals and uncapped maximums.
The structured plans, if done correctly, are an effective way to help insure the goal of wealth
maximization, but they are also by definition agency costs. Hence, agency problems are inherent to
our American corporate system. Works Cited: Megginson, W. L., & Smart, S. B. (2009).
Introduction to Corporate Finance. Mason, OH: South–Western. Chapter 2 If you were a
commercial credit analyst charged with the responsibility of making an

Computech Company Case Mergers&Acquisitions
Company Profile of CompuTech Company
Marco Garibaldi was a computer hacker and began to develop computer programs in the basement
of his parents' home. His first software program named as "WordPro" aroused great interest among
the academic and the business communities. That was the story behind the establishment of
"CompuTech Industries" in 1983. The company went to public in 1990 for the first time. By the end
of 1995, CompuTech's stock price was $25 per share and its outstanding shares were 10,000,000.
CompuTech has developed a solid reputation especially for reliability and timely introduction of
new products. Besides, it supplies a toll–free telephone service in order to identify and correct
program bugs. Its products are ... Show more content on Helpwriting.net ...
M&A is useful especially when the management of target firm is not so successful. After acquisition
new management can increase value of the target firm by well managing, decreasing costs and
increasing efficiency.
The last one is about synergy. When two firms are combined, an extra value for occurs for the
companies apart from the summation of their standalone entity. It refers to synergy.
From society's point of view synergy is the most justifiable motive. Shared know–how, intangible
resources (generally human resources, corporate culture, business creation etc.), more efficiently
used physical resources, economies of scale, reduced costs lead more successful business. They are
advantages for different stakeholder parties within the company as well. Also it increases
competitiveness in the industry. It turns into offering best efforts for the wellbeing of customers. It
can be seen as an equation, which gives more than its numerical total: one plus one is more than two
for every one.
Another socially justifiable motive is control. Changing the control of the firm will increase
shareholders' wealth (that is the ultimate goal in business) and thus it increases benefits of
shareholders. After M&A most of the companies are managed and controlled more successfully than
the previous managers.
On the other side, there are some motives, which can't be justified socially. Tax consideration can't
be justifiable from

Revlon V. Mcandrews And Forbes
Revlon v. McAndrews & Forbes: Less than a year later, the Delaware Supreme Court circumscribed
directors' freedom of action by holding in this case that, once a sale is in progress, the director's duty
switches from protection or maintenance of the corporate enterprise to obtaining ''the highest price
for the benefit of the shareholders. In other words, once directors understand that the takeover will
be successful, their duty is simply to obtain the best price for the shareholders.
The first precedents of the Delaware Supreme Court show that the standards were reluctant to the
permissiveness in adopting defensive measures. Rather, the courts preferred the passivity of the
board. However, 4 years later the standards changed when the Court relaxed the reins that had been
tightened in Unocal and Revlon.
Paramount Inc. v. Time Inc.: The court gave more leeway to directors in deciding on defensive
measures, even after it was inevitable that the target would be sold. The court held that directors of
target could consider factors other than money values of the offers, including the amount of
information available to shareholders, the conditions attached to the offers, and the timing. These
factors might justify defensive measures. These defenses were called ''just say no defenses''. They
refer to the ability of directors to simply reject takeovers for the purpose of protecting the
constituencies of the company.
Unitrin v. American General: The Supreme Court of Delaware expanded

Success : The Nurture Achievement
Success: The Nurture Achievement
According to the Outliers, Malcolm Gladwell views success as a byproduct of history and
community, of opportunity and legacy (285). Although everyone tries to become successful in their
life, not all of them get their success because they all have different backgrounds, grow in different
environments and different cultures. Moreover, these different situations determine a person's
success by providing different chances. So, the many opportunities the environment provide, the
more successful they become. Therefore, success is derived from the environment, and people
achieve it through nurture because the community and family supports give a lot of chances,
benefits and encouragements that make them become ... Show more content on Helpwriting.net ...
In addition, my evidence is important because I am trying to say that he had reached his way too
superior in programming than anyone at that time. Thus, that superiority in the programming field
gave him a chance to obtain a lot of experiences compared to other people in that period of time.
Without that best environment, supports and the first biggest opportunity that he got at Lakeside, he
wasn't famous and successful in his life. As the result, the opportunities and experiences that people
get from their environments are the main reasons for them to attain their success.
Although people were not born from the wealthy family backgrounds, the situations such as policy
changes and depression period also help their weakness to turn into their success. In Chapter Five,
Gladwell explains how Joe Flom's life turned out to be famous and an expert in a law firm because
he involved in the situation when the old law firm was fallen and the new law policy was created.
Since Flom was the Jewish when Jews were heavily discriminated against, it was really hard to
become a lawyer in the old–line law firms. Then, the old–line law firms had corporate lawyers who
represented country's largest companies, and they handled the taxes and the legal work behind the
issuing of stocks. However, they didn't do litigation and proxy fight because they did not deal with
the hostile corporate takeovers.

Interpretation Of Interco‚Äôs Financial Performance

Recommended

Recommended

More Related Content

More from Adriana Wilson

More from Adriana Wilson (20)

Recently uploaded

Recently uploaded (20)

Interpretation Of Interco‚Äôs Financial Performance