Caso Cooper

1467 Words6 Pages
ESAN UNIVERSITY
FINANCE I

Professor: LUIS A. PIAZZON, PH.D

Cooper Industries, Inc.

By
Melissa Lezameta
Támara Alfonso
Christian García
Miguel Amable

CASE: COOPER INDUSTRIES, INC.

Following are the answers to the case:

1. If you were Mr. Cizik of Cooper Industries, would you try to gain control of Nicholson File Company in May 1972?

Methodology
We have taken the flowing steps for this analysis: * Determine the value of the Nicholson File Company as a whole. For this we have calculated the NPV. * Determined the value of Nicholson on a synergy, assuming after it has been acquired by Coopers. * Determine the value of Cooper Industries on after the synergy. We have calculated the new NPV for this
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What must Cooper offer each group in order to acquire its shares?

The main concerns of this case are the way the shareholder stock will be handle (valued) and what the profitable advantages in acquiring Nicholson 's majority shares.
According to our calculations Cooper Copper has an optimum bargaining position because they can offer up to $60.13 (at a 4% growth estimated rate) for it’s the stock in order to acquire the majority its shares. Porter 's offer of $42.00 per share failed to get the majority of shares need to acquire control. VLN 's offered to honor the price of $53.10 for preferred shares. This is the share value that speculators and stockholders would hope to obtain although the actual offer could end up to be much less. According to our calculations and analysis the best possible offer Copper can offer up to $60.13 (at a 4% growth estimated rate) per share for Nicholson stock.

4. On the assumption that the Cooper management wants to acquire at least 80% of the outstanding Nicholson stock and to make the same offer to all stockholders, what offer must Cooper management make – in terms of dollar value and the form of payment (cash, stock, debt)?

In order to acquire at least 80% of the outstanding Nicholson stock, Cooper will have to acquire all other stocks including those owned by Porter Inc., except those belonging to the Nicholson family and management, since we are supposing that Nicholson
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