Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.
Authors: Bob Bruner
Published by: Darden Business Publishing
Originally published in: 1997
Version: Rev 2.99

Abstract

The B case, part of a series of cases that simulate a hostile-takeover attempt involving four companies in January 1997, focuses on the raider company, which has a history of hostile action, usually profiting from greenmail or the bust-up liquidation of the unfortunate target. The exercise organizes students into teams representing the four companies, and each team must negotiate an outcome that is most advantageous to its firm. The parties are motivated to act because the expiration of the raider's tender offer will occur soon, and if there is no higher offer outstanding, the arbitrageurs will tender their shares and the raider will tender its control. All parties know that the target company's board of directors is meeting in a few hours to settle on a course of action. This exercise is ideally suited to (1) hone students' valuation and negotiation skills, (2) train students in the unusual dynamics of hostile takeovers, and (3) develop an understanding of some fundamental points of corporate governance, including the responsibilities of a board of directors and the agency problems that can arise when managers' jobs are threatened. An Excel spreadsheet is available to accompany this case.
Location:
Size:
Large
Other setting(s):
1997

About

Abstract

The B case, part of a series of cases that simulate a hostile-takeover attempt involving four companies in January 1997, focuses on the raider company, which has a history of hostile action, usually profiting from greenmail or the bust-up liquidation of the unfortunate target. The exercise organizes students into teams representing the four companies, and each team must negotiate an outcome that is most advantageous to its firm. The parties are motivated to act because the expiration of the raider's tender offer will occur soon, and if there is no higher offer outstanding, the arbitrageurs will tender their shares and the raider will tender its control. All parties know that the target company's board of directors is meeting in a few hours to settle on a course of action. This exercise is ideally suited to (1) hone students' valuation and negotiation skills, (2) train students in the unusual dynamics of hostile takeovers, and (3) develop an understanding of some fundamental points of corporate governance, including the responsibilities of a board of directors and the agency problems that can arise when managers' jobs are threatened. An Excel spreadsheet is available to accompany this case.

Settings

Location:
Size:
Large
Other setting(s):
1997

Related