Northampton Group Inc. – Case Study Analyses: How to Increase Shareholder Value

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Northampton Group Inc. – Case Study Analyses: How to increase shareholder value Nicole Arends, Jenny Feng, Laura Tromp & Zilha Wever FHTMS University of Aruba Mr. Don Taylor Corporate Finance FTS 2415 March 26, 2013 Introduction This Corporate Finance paper focuses on analyzing the challenges that Northampton Group Inc. (NGI) is facing as it tries to increase shareholder value. In the case study it is stated by the firm’s major shareholders, that they believe NGI is currently undervalued. In connection with this, the management of NGI is considering several means of increasing the shareholders value. Due to difficult economic conditions resulting from the Global Economic Crisis, there are both…show more content…
is one of Canada’s top hoteliers in the mid-market, owning interests in 16 hotels in Canada and the United States. Furthermore NGI is in ownership of 2,200 rooms in 17 hotels across Canada and the United States. The Company is expert in all facets of the hotel business, from marketing to building to management. Focused on creating the best return and value for all stakeholders, Northampton’s market-sensitive strategy is to acquire or build hotels that provide great value and superior accommodation. Gratefully, NGI excels in this sector by offering services that exceed expectations while still posting industry-leading margins. Besides acquiring and developing undervalued and underutilized hotel assets, NGI also provides superior overnight accommodations at mid-market prices. This has been done through aggressive marketing, re-branding and ongoing hotel upgrades. NGI opened its first select-service hotel in 2008 as a first initiative of its strategy in order to increase the quality of the properties in its portfolio to select-service a more upscale hotels. Furthermore NGI had earned numerous awards for its achievements in service and operating abilities over their years of existence. NGI’s share price has dropped over the past few years, despite the good reputation they have. The Global Economic Crisis has been a consequence for NGI’s difficult economic conditions. This resulted in management and shareholders concerns that the company was undervalued. NGI’s

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