Cooper Industries

First, the projected cash flows range from $21.2 million in 2007 to $29.5 million in 2011 as shown in the data exhibit ‘DCF model.’ To generate these numbers Liedtke’s base case performance projections are used for the projected 2007 – 2011 net revenue numbers and the estimated depreciation and then his projections for Balance sheet accounts were used to determine the current net working capital and capital expenditure as in the exhibit ‘Financial statements.’ These projections were based by Liedtke under the following assumptions, women’s casual footwear would be wound down within one year and the historical corporate overhead-revenue ratio would conform to historical averages. These annual cash flows give us a PV (Cash flows) of $96.15 million over the next 5 years.

(a) Why did CSX make a two-tiered offer? What effect does this structure have on the transaction?

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.

Q3. Do you agree with Mr. Clarkson’s estimation of the company loan requirements? How much will he need to finance the expected expansion in sales to $ 5.5 Mil. In 1996 and to take all trade discounts?

A) What is the possible meaning of the changes in stock price for GEICO and Berkshire Hathaway on the day of the acquisition announcement?

A) What is the possible meaning of the changes in stock price for GEICO and Berkshire Hathaway on the day of the acquisition announcement?

Grommet Industries is facing some very tough business decisions to stabilize the company and restructure to stimulate growth. The HR issues that I am now asked to address in our meeting with Mr. Ramon include identifying the issues we are facing, the options we have to work with, and strategies to use for implementation.

2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case, what is the value to MCI shareholders?

If we were partners in CHB Capital Partners, we would advocate selling to the strategic buyer because we would receive a higher premium and return from this transaction. CHB has done a great job with Spyder as the company has experiences rapid growth and tremendous success that they should not wait longer to capitalize on the IRR. If this transaction took place, the people affected would be more than just the partners in CHB as they would

To resolve the ownership situation of Midwest Lighting, (MLI) Inc Peterson and Scott have to sit down with their financial managers, evaluate the company and then decide that one of them will buy out the other from the company. And with the history of the company having being formed with Peterson’s father, it would be prudent that Jack Peterson be given the opportunity to buy out Scott from the company since his family only joined in years after the Petersons had started it and bought out Julian Walters.

Over 30 divestitures in under 20 years in efforts to only keep business that would continue to add value

A prospective buyer has to consider the motives and financial positions of other bidders. Kohlberg wants to buyout the company in order to turn it into a private firm. ARCO has a pretty strict limit in what it can offer because of its highly leveraged position. Even if a company has the ability to take out a larger loan to make a greater offer, it has to consider the consequences of doing so. While a company like Socal has unrestricted credit, its decisions as to how to operate the company after the buyout are very limited. Creating a lot of debt in order to finance the purchase is a large risk. If the company does not perform well in the future it could face tremendous loss. In this case, a bid of $80 per share would be appropriate for an un-leveraged company like Socal. This would be enough to win Gulf while still leaving breathing room for shareholders. Taxes do not need to be considered, because the benefits cancel out the

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

How much should he bid? (It's an option as well to withdrow from the market)

Before the offer, the board must not take any action, except pursuant to already existing contracts, without shareholders’ approval in a general meeting, regarding the offeree company which can lead any bona fide offer to frustrate or deny an opportunity to the shareholders to decide on the merits of the offer. The facts state that an investment agreement with Side Petroleum was entered by Glenco in 2014 after consulting with the board members, with the concern that Amex may re-launch another bid. This was clearly an action taken by the board leading to the frustration of Amex’s bona-fide offer, especially when it is done without shareholder