dows bid for rohm and haas

This case focuses on David Sokol, an executive who has made a “name” for himself in recent years within the energy industries. After becoming recognized as a successful “turnaround” agent for troubled companies, Sokol was hired in 1992 to serve as the chief operating officer of JWP, Inc., a large, New York-based conglomerate. At the time, JWP had an impressive history of sustained profits and revenue growth that was being threatened by the company’s far-flung operations and unwieldy organizational structure. Unknown to Sokol, JWP’s impressive operating results over the prior few years had been embellished by the company’s

Profitability of oil companies declined due to low prices; and most of these firms responded with cost-cutting measures. Many top companies divested their marginal properties, seeking to consolidate and rationalize their productive assets- one of which was Amoco Corporation. Amoco Corporation conducted an extensive review of its cost structure and profitability (p.2), leading to major restructurings to better focus on its core businesses. The result of this was a divestment of the middle section of its assets along marginal curve. Morgan Stanley advised and assisted in the process, creating MW Petroleum Corporation – a new, free-standing exploration and production oil and gas company. MW was offered to a number of targeted international petroleum concerns, but the most attractive offer came from Apache Corporation. Apache Corporation was an independent oil and gas company based in Denver, Colorado engaged in exploration, development, and production of oil and natural gas. Their strategy, “rationalize and reconfigure” involves acquiring producing properties whose operations Apache could quickly control and make more efficient, producing significant cost-saving opportunities for the company. The sale of MW Petroleum provides such an opportunity for them. However, Apache must first carefully evaluate MW’s value to come up with a proposal that would be attractive for Amoco and profitable for Apache as well. CRITICAL ANALYSIS

a.How much business risk is associated with Sterling’s proposed acquisition of the germicidal, sanitation, and antiseptic products unit of Montagne Medical?

We use Capital Asset Pricing Model (CAPM) approach to calculate the cost of equity. The formula of CAPM is re = rf + β × (E[RMkt] – rf).

This case study examines the proposed merger of Vulcan Materials and Martin Marietta both providers of construction aggregates. A stock-for-stock merger had the potential of making the company a global leader in construction materials, but was marred by disagreements over executive succession, location of new headquarters and the stock exchange proposed by Martin Marietta. Furthermore, as negotiations deteriorated Martin Marietta attempted a hostile takeover of Vulcan and also tried to get its directors appointed to

The change in the growth assumption has significant impact on the stock price. Under the high estimate of growth rate 236%, the new price per share is $107.56. Under the low estimate of growth rate 35%, the new price per share is $2.36.

How much value do you expect to be created by operating improvements and capital structure changes envisioned by CD&R?

E. I. du Pont de Nemours is an American chemical company that has recently acquired the major oil company of Conoco Inc. and is becoming one of the largest chemical manufacturers in the United States. Its financial conservatism has pushed Du Pont to the forefront of the industry as its profitability soared, providing it with the liquidity to readily finance its cash needs. But several competitive conditions posed a challenge to its risk averse financial policy as the 1970's was characteristic of a declining level of industry demand and price, along with rising fuel prices and an economic recession. These pressures now force Du Pont to source its financing through debt, foregoing its risk averse

Analysts estimate that the $80 million in cost saving could be realized after the acquisition , however certain other costs associated with the integration approximately $130 million would occur .Hence, I take these cost savings and integration costs into consideration for the with-synergies valuation. Incorporating the effects of 80million cost savings for the merged firm (to be achieved by end of 2007 and assumed to incur in perpetuity then on) and 130 million integration costs (half of this accounted at the beginning years) in the estimated EBITs for Torrington, a new horizon value is estimated, the new FCF is discounted by acquiring company’s WACC 8.39%. Torrington company’s with- synergies valuation $1386.38 million exceeds the value as a stand-alone entity by approximately $286 million. sheet2: With-synergies Valuation of Torrington-DCF Method.

Grand Metropolitan PLC is the world’s largest wine and spirits seller. It mainly operated in London, USA. In 1991, it beats market expectation with a 4.8% increase in pretax profits, and the company Chairman stated that company’s goal “to constantly improve on”. Despite the great performance in the world recession in 1991, the price of GrandMet shares was 10% below the average price/earnings ratio of the companies in the Standard & Poor’s 500 index. And more important, rumors had that GrandMet, valued at more than $14 billion in the stock market, maybe a takeover target. The management dilemma is to understand why the company’s stock is traded below of what considered being the right price and whether the company is truly

This paper will describe the problem that Pacific Oil Company faced as it reopened negotiations with Reliant Chemical Company in early 1985. Secondly I will identify and evaluate the styles and effectiveness of Messrs, Fonatine, Guadin, Hauptmann, and Zinnser as negotiations in this case. Finally I will outline what Frank Kelsey recommend to Jean Fontaine at the end of the case? Why?

Jessica Gallinelli, managing director of Bancroft capital management is facing financial decision either to hold or sell her shares in Honeywell before Honeywell merge with GE. Gallinelli own 10 million shares in Honeywell and its short position of 10 million shares in GE. The key factors on Gallinelli either to sell or hold shares were based on the value of shares after the merger, also she wanted to know how the market will respond to Honeywell shares after decisions from both the antitrust regulatory of the European Commission (EC) and The U.S. department of justice.

In order to recognize the cost synergies, Dow had one time cost of $1.3 billion spread within two years. They will achieve at least 800 million cost synergies. Growth Synergies are estimated to be between $2B and $2.6B based on expanded market portfolios, increased geographic reach and innovative technologies. Adjusting the cost synergies we calculated an equity value per share $94.63 per Rohm and Haas share.

The announcement from A-1 Holdings Company for a hostile takeover made National Brands’ management worried. The CEO of the National Brand, Bill Hall, the chief operating officer, Tom Straw, the chief financial officer, Doris Faraday, and Stan Lindner from public relation all sat down and discussed on this particular problem. So far, A-1 Holdings had already bought 5 percent of National Brand’s outstanding shares and made offer for the rest at 7 1/8 over market, which was $55 per share. For Bill Hall, the head of A-1 Holdings, Kelly O’Brien was a bad guy who might just want to take over the company and make his employees miserable. Tom Straw then suggested the poison pill approach to defense the takeover but the idea was doubted by Stan because it did not seem good for the company. Doris, after working with her numbers, proposed her Pac Man defense idea. The Pac Man defense approach meant making counter offer to buy A-1 Holdings at $17 a share. She believed with National Brands’ strong financial position, it is highly possible that this defense would work. Bill agreed with this idea and started to have his people working on analyzing the details of this approach.

Business Analysis of Gulf States Metals Inc. Gulf States Metals Inc. (GSM) is a large nickel refinery plant that has suffered poor financial performance and is under the threat of being shut down by its parent company International Metals Inc. This paper aims to, firstly, analyse the issues that are contributing to the low performance, secondly, to provide some options for moving forward and thirdly, to present a set of substantiated recommendations. The analysis will be tackled through