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Cooper Industries Case Stud1

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Cooper Industries Case Study Introduction: Cooper Industries Inc., is considering an acquisition of Nicholson File Company, a candidate for the company’s diversification program. Cooper CEO Robert Cizik approached Nicholson three years prior and was rejected, but the circumstances have changed and there is a real opportunity for Cooper to acquire Nicholson. Our team of analysts will evaluate the company’s financials to determine whether or not this is a smart acquisition for Cooper. Based off our research we believe Mr. Cizik of Cooper Industries should try and gain control of Nicholson File Company. Below we will show why we believe this is a smart acquisition. The reason Cooper should work to acquire is the vast amounts of synergy …show more content…

Nicholson currently has a value of $44 and a Book Value of $51.25. For this reason we believe we can offer just above the book value, $52 a share to the current stockholders, 16% more than what it is currently being traded for, and still be attractive from Cooper’s perspective. This is $10 more than what was offered by H.K. Porter company earlier in the year. By offering this much it satisfies Nicholson while still keeping the company attractive to Cooper’s shareholders. The difficult thing for Cooper is that they do not need to convince one group to sell them their shares, but five altogether: H.K. Porter; Nicholson Family and Management; shares owned by VLN; shares owned by speculators; and shares existing that are unaccounted for. Our team has broken down each of these groups, describing what the concerns and bargaining positions of each group are, and what Cooper must offer in order to acquire their shares. Cooper (29,000): Concerns: Cooper, through the support of the votes from Porter is looking to acquire Nicholson. Their concerns are on getting the necessary votes and

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