Negotiations between AT and T and McCaw

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.

The company is the corporation’s question mark performer and has the potential of becoming a star performer given the limited competition in the market. The company has the advantage of the parent corporation’s 25-year-old positive reputation as a local family owned business known for the quality of their products.

SGMT  6050  –  Case  Write-­‐Up   McCaw   Cellular  Communications:  The  AT&T/McCaw  Merger   Negotiation     Armin  Ezatagha     Student  Number  ⏐  205  576  707   eMail  ⏐  aezatagha12@schulich.yorku.ca     Schulich  School  of  Business   Tuesday,  March  05,  2013                                 Current  Telecommunications  Ecosystem     McCaw  Cellular  Communications  (MCC),  although  positioned

Our case study titled, The AT&T and McCaw merger negotiation, provides us with an opportunity to negotiate the terms of the merger between McCaw cellular and AT&T. McCaw was the largest competitor in the rapidly growing cellular telephone communications industry. AT&T was the dominant competitor in long-distance telephone communications in the United States, and one of the largest corporations. Prior to the negotiations, it had no position in cellular communications.

Established in 1984, 210 full-time employees, 200 part-time employees. 2006 sales = $1.9 Billion. Dealing with an

1. What are the strengths and weaknesses of Verizon, MCI, and Qwest? Where are the synergies in the proposed combination?

Comcast had 8.5 million subscriber and $1 billion investment from Microsoft and several entertainment assets were included.

Group Assignment on“Kohler (A) M&A Valuation”Submitted toINSTRUCTOR: ___________________In partial fulfillment for requirements of the courseMergers and Acquisitions (2012-2013)ByGroup K On19 November 2012

 As a consequence of the governments intervention, the AT&T lawsuit settlement, as well as the shift in the telecommunication industry, it was clear that AT&Ts local telecommunication business was slowly moving away from a monopoly franchise environment. It was moving towards a more competitive environment characterized with more consumer choice and greater competition. Companies such as IBM saw the divestiture of AT&T as an opportunity to provide new telecommunication equipment and services, which would allow them to gain a higher market share. AT&T's stock had up till then been regarded as a stable utility-type stock because of its steady growth and consistent dividend yield. However, AT&T should have kept in mind that they would not have as much market control in the future as they did prior the divestiture, much due to the intensifying competition and regulatory environment changes.

Abernethy and Chapman are desirable because they have a steady clientele and continue to generate revenues leaving them with a net income that is favorable. Often companies will merge with another company in an effort to avoid bankruptcy, consolidate services, or expand. Over the years, we’ve seen many big-name firms merge with others. Acquisitions and mergers are becoming a trend due to the number of partner retirements and the lack of succession plans. (Sinkin and Putney, 2013) Firms such as Abernethy and Chapman might agree to an acquisition because it is often the most cost-effective way for them to increase cash flow and continue to be successful. Mergers can either be a success or a failure. When you merge organizations, you are also merging personalities which can often lead to conflict; however, merging the different levels of expertise could be beneficial to a firm. Ultimately, I believe that merging firms will create

We valued the company using four different methods; Net Present Value, Internal Rate of Return, Modified Internal Rate of Return and Profitability Index. We began with the Net Present Value, or NPV, calculation. NPV values an investment’s profitability based on the projected future cash inflows and outflows of the investment, discounted back to present value using the WACC. The calculations for NPV are presented in Appendix 2. We started by separating cash inflows and outflows by each year. We used Bob Prescott’s estimates for the revenue per year and related operating costs of cost of goods sold as

It is determined that the company worth is $856,518 with a share price of $351.03 per value as per the discounting dividend cash flow valuation approach..In appraising the anticipated premerger performance of the company, the weighted average cost of capital is computed; the worth of the WACC for FVC is 9.2% as depicted in

Problem: What initial public offering valuation would be most appropriate for Goldman Sachs & Co. to use?

Analysis: The company categorized its businesses according to the makeup of their customer base. The different categories were "lead, driver and prosper". The latter group had less than 50 employees and limited growth potential. These agencies needed to have high margins in order to survive. Drive agencies had between 50-150 employees. They had dual objectives of growing both revenue and margins. Lead agencies were the largest agencies for the company. These high-volume agencies were expected to generate rapid growth, and as such they would receive most of the firm's investment capital.

We performed a DCF Analysis for two scenarios: 1) assuming the purchase of the residual equity of LIN Broadcasting; and 2) assuming the sale of the residual equity of LIN Broadcasting (See Exhibits 1 & 2). The most critical assumptions impacting value were: 1) discount rate and 2) terminal growth rate. We relied on discount rates between