Paramount's Above Market Offer For Time Inc.

Swan-Davis, Inc. (SDI) manufactures equipment for sale to large contractors. The company was founded in 1976 by Tom Stone, the current chairman, and it went public in 1980 at $1 per share. The stock currently sells for $15, Stone owns 14 percent of the shares, and other officers and directors control another 13 percent. The industry is cyclical, and competition is strong, so profits are some-what unstable. Tables 1, 2, and 3 provide historical balance sheets, income statements, and ratios for the company for the period 1994–1996, Table 4 provides industry average data for 1994-1996, and Table 5 provides one security analyst’s forecasted data for the company based on assumptions

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.

The weekly performance of IBM stock presented a contestant growth. One highlight of the falling of stock price in the 6th week in the investment period was when IBM presented the 3rd quarter financial report. The investors weren’t satisfied with the profit report which they expected to be better especially when other IT companies were doing well in the 3rd quarter. One mistake I made was that I didn’t follow closely to the financial report of the company; therefore, I missed the peak of the stock price. From this experience, I learned that financial reports and current news are important indicators of the stock price. By following closely to the current event and analyzing the financial report, investors can maximize the profit and also become more familiar to the market.

4. What are the advantages and disadvantages of the 1987 buyout, viewed as a financial program?

The maximum share price, if Herbert Kohler is willing to settle with the dissenting shareholders to stop the trail on April 11, 2000, is $120,680.  Given the probability of the two outcomes, the expected price for $273,000 per share claim (probability 30%) was $81,900 and the

OTT purchased 11 shares of Happy New Year & Co. stock on at $20 a share 
on Jan. 3, 20X1, and the price dropped to $15 in March and remained steady till Dec. 31, 20X1. OTT management does not believe the decline in price to be

Set in May 2005, this case invites the student to assess Berkshire Hathaway’s bid, through MidAmerican Energy Holdings Company, its wholly owned subsidiary, for the regulated energy-utility PacifiCorp. The task for the student is to perform a simple valuation of PacifiCorp and to consider the reasonableness of Berkshire’s offer. Student analysis readily extends into the investment philosophy and the remarkable record of Berkshire’s chair and CEO, Warren E. Buffett.

6. If the company decides to go ahead with the targeted stock issue, what specific provisions or features should the stock include to ensure maximum value creation? How closely would you model USX’s targeted stock on GM’s alphabet stock?

It is important for stockholders to continuously re-evaluate their investments. Although some investors do this more frequently and thoroughly than others, the majority of shareholders do so at least once each year. Therefore, Torres’ desire to update her analysis in order to determine whether Costco was still operating efficiently makes perfect sense. After thorough examination, my analysis proves that Costco remains one of the industry’s leading competitors and there seems to be no reason for Torres to sell her shares as long as she wishes to retain holdings of a retail wholesale club in her portfolio.

The management of JetBlue and its underwriters can also price the IPO using valuation multiples. JetBlue can employ the most current comparable data of the most appropriate competitors in terms of value in the airline industry. Valuation multiples that can be employed include, but are not limited to P/E multiples, EBIT multiples, EBITDA multiples. In this scenario, I choose to use Southwest airlines and Ryanair as the major benchmarks, because they are both considered as major low –fare airlines, and are key competitors in the United States and Europe. Nevertheless, I believe the P/E ratio is the stronger valuation tool to determine the true value of a firm. Using this method we come up with a share price of $19.32 for Southwest

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

The previous 959.6m Amoco shares will convert into 633.336m shares of BP ADS equivalent, with the previous 965.6m ADS shares, BP shareholders will take part 60% of the new company, still have majority control over the firm. In this deal, we paid for about 20% premium, which is quite standard and normal. Because synergies from revenue and chemical divisions’ combination are not estimated nor not expected to bring benefit, the main synergy from the merge is 2 billion dollars saving of pretax operating cost. The value we create for our shareholders is $14,840.06 million (Amoco stand-alone value $46,430 million+ synergy $2 billion – price paid for Amoco $33,538.94). But this number is quite sensitive to a lot of factors, such as future energy demand, oil and gas price, industry growth potentials, ultimately affecting Amoco’s stand-alone and synergy valuation. Please

As the material (Harvard Business School, 9-298-006, July 2005) tells, would CSX together with the management and the employees trust control 35,5% for the shares, and therefore would they only need 14,6% to vote in favor of the opting-out, so it would pass. Then afterward would it be possible for CSX to acquire the additional 20,3 % due to the first tier second stage, and then could their proceed with the back-end offer for the remaining 60%.

So, the most important reason for Norfolk Southern to make this bid was a desire to survive, it is like survival insurance. 5. In order to determine this value, we should take two aspects into consideration. Firstly, CSX was the first bidder, which implies that Norfolk Southern 's offer is a reaction to that of CSX. Norfolk Southern hostile bid of $100 per share represented a 14.1% premium over CSXs blended offer of $89.07. But if we look at the next reaction of Norfolk Southern, this offer did not create the reaction Norfolk Southern was hoping for, since after the new amendment made by CSX of $110 per Conrail share, Norfolk Southern offered after only two days the same value. CSX maintained its position at $110 per share for the front-end until the last day before the shareholders vote, but increased its back-end position (adding $16 of new convertible preferred stock to the back-end offer) 4 days before the vote. Norfolk Southern also increased its offer to $115 per share.

Headquartered in Texas, Teletech Corporation operates under two main business segments: the Telecommunications Services segment, providing various telephone services to business and residential customers and the Products & Systems segment, which manufactures computing and telecommunications equipment. In late 2005, the Securities & Exchange Commission revealed that billionaire Victor Yossarian acquired a 10% stake in Teletech and demanded two seats on the board of directors. He felt that the firm was misusing their resources and not earning a sufficient return. He stated that Teletech should sell off its Product & Systems segment and focus on creating value for the company’s shareholders. A detailed analysis will reveal