Essay About Firms Own Management And Tender Offer

Emerging Capital Market
Problem 14.1
NPV of original 1.074254734
NPV of option 0.950667906
It makes sense to wait one year and attempt to lock in the 50m cash flows.
Tax = -2.113481306
No tax = 1.973037387
EV = -0.070221959
Yes, accept the project
M&A incentives: Synergies, tax, purchase of assets < replacement costs, diversification, gaining control of larger enterprise, breakup value Congeric merger: related industries but no customer-supplier relationship Conglomerate: totally different industries LBO – transaction where firmss publicly owned stock is acquired in a mostly debt-financed tender offer and a privately own highly leveraged firm results. The firms own management often initiates the LBO. Divesture: selling operating unit, spinning off to separate company, carving out by selling minority interest and outright liquidation  clarifies operations, settles antitrust suits, enables management focus, raise capital Discussion and Problem Solving: Q14.1, P14.3-5, Q26.1-5, P26.5-6 kProblem 14.1 NPV of original 1.074254734 NPV of option 0.950667906 It makes sense to wait one year and attempt to lock in the 50m cash flows. Tax = -2.113481306 No tax = 1.973037387 EV = -0.070221959 Yes, accept the project M&A incentives: Synergies, tax, purchase of assets < replacement costs, diversification, gaining control of larger enterprise, breakup value