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Case
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Reference no. UVA-F-0793
Published by: Darden Business Publishing
Originally published in: 1988
Version: Rev 7.89
Length: 16 pages
Data source: Field research
Topics: Finance

Abstract

This case is meant to follow the negotiation cases: 'Hybritech, Incorporated (A)' and 'Eli Lilly and Company'. The case deals with the financial structure of the acquisition and requires students to analyze the value of cash payments versus convertible notes and the value of Lilly warrants and contingent-payment units to old Hybritech stockholders based on future Hybritech performance. The complicated proposed payment stems from differing expectations about Hybritech's performance. Students must determine whether the structure is fair to both Lilly and Hybritech shareholders.

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Abstract

This case is meant to follow the negotiation cases: 'Hybritech, Incorporated (A)' and 'Eli Lilly and Company'. The case deals with the financial structure of the acquisition and requires students to analyze the value of cash payments versus convertible notes and the value of Lilly warrants and contingent-payment units to old Hybritech stockholders based on future Hybritech performance. The complicated proposed payment stems from differing expectations about Hybritech's performance. Students must determine whether the structure is fair to both Lilly and Hybritech shareholders.

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