Mercury Case

The major dilemma at hand is avoiding a takeover. The economy was bad at the time, and the company's stock price was thought to be undervalued, as their low P/E ratio of 13.3 indicated. Management needs to find out why their stock price is so undervalued.

4 (b) Evaluate the argument that managers controlling large companies might follow policies which do not necessarily maximise the profits of the owners.

c. Did anything surprise you about the company's values? Why or why not? (1-3 sentences. 1.0 points)

2. What do you think are the motives of Harnischfeger's management in making the changes in its financial reporting policies? Do you think investors will see through these changes?

1. Do you think Mercury is an appropriate target for AGI? Why or why not?

b) (2 pts.) Does either firm have a dominant strategy? If yes, which firm and what strategy?

For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

1. How would you characterize the business risk of Bed Bath & Beyond? Review their financial performance.

3. Considering your response to questions 1 and 2, do you believe that the going- concern uncertainty was warranted? Do you believe that Deloitte & Touche should have issued a going- concern opinion prior to 2008?

B) How well has Berkshire Hathaway performed? In the aggregate? In its investment in Scott & Fetzer? In its investments in earlier purchases of GEICO stock? In its investments in convertible preferred securities?

3. What strategies could Adesemi have applied to overcome its operational problems once they occurred? What strategies might the company have applied prior to its investment?

Case felt that the vertical integration of the two companies would promote synergy. They believed Time Warner could gain from AOL’s experience and brand recognition in the new Internet industry while AOL would benefit from Time Warner’s cable infrastructure. The two CEOs noted that both companies had comparable values that would mesh well together. Both sides had been interested in merging with another large company in a related industry. AOL “had been plotting for months about how to use its high-priced stock to make a big acquisition. The company hired the investment bank Salomon Smith Barney… to consider various targets.” AOL was in talks with eBay and Electronic Arts while Time Warner was discussing a merger with Yahoo. Levin and Time Warner felt that they had transform their company in order to be competitive in the fast paced Internet age. AOL feared that if they did not move quickly to offer high-speed cable Internet their market share would vanish.

As we are familiar with the case, we feel that two very important issues have not been addressed which in sufficient detail, given that in the may influence the profitability of the business venture. These are

(b). Justify at least one plausible future for the specific organisation as why it is the best to pursue, and a comparison with each of the other two futures.

a. Did Altex need a new system? (What are the most critical problems facing Altex at the takeover? what does Ted see as the purpose of a control system? Did Altex meet their objectives?)