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.
Compact case
Supplement
-
Reference no. 110-003-4
Authors: Joao Paulo Mateus (AESE Business School); Mario Porfirio (AESE Business School); Jorge Ribeiro (AESE Business School); Joao Henriques (AESE Business School); Francisco Carvalho (AESE Business School); Diogo Travassos (AESE Business School); Ana Ricart (AESE Business School); Joao Camoes (AESE Business School); Tiago Vaz Serra (AESE Business School); Pedro Pimentel (AESE Business School); Ricardo Bastos (AESE Business School)
Published in: 2006

Abstract

This supplement is to accompany the case ''110-003-1''. The abstract of the case is as follows: At the end of 2004 a Portuguese bank, Banco Portugues de Investimentos (BPI) owned a relevant share of SIC''s capital. SIC is one of the two private television broadcasters in Portugal. Impresa, a company traded in the stock exchange and also an important one in the media, owns the majority of SIC''s capital. The new accounting rules (IAS), together with the Basle II agreement made sense for BPI to sell its position, therefore the bank proposed an exchange of shares with Impresa (swapping SIC shares for Impresa ones). That would make Impreger (personal holding of Pinto Balsemao, the Impresa owner) lose control of Impresa and so Impresa made a counterproposal: to buy BPI''s shares. This was possible because on owning 100% of SIC, Impresa would have SIC''s cash flow at its disposal. The case allows students to understand the reason why European banks are alienating their participations in companies that aren''t in the stock exchange market. Also students will understand the importance of shareholders agreements and the financial reasoning behind the set up of an operation that, at first sight, seemed impossible for Impresa. The use of multiples as a reference for evaluating a company value is widely employed in the case. From a pedagogical point of view it''s particularly interesting to note that the estimate value creation to the Impresa shareholders, originated by this finance operation, matched the valorisation of its shares in the following weeks.
Location:
Industry:
Other setting(s):
2009

About

Abstract

This supplement is to accompany the case ''110-003-1''. The abstract of the case is as follows: At the end of 2004 a Portuguese bank, Banco Portugues de Investimentos (BPI) owned a relevant share of SIC''s capital. SIC is one of the two private television broadcasters in Portugal. Impresa, a company traded in the stock exchange and also an important one in the media, owns the majority of SIC''s capital. The new accounting rules (IAS), together with the Basle II agreement made sense for BPI to sell its position, therefore the bank proposed an exchange of shares with Impresa (swapping SIC shares for Impresa ones). That would make Impreger (personal holding of Pinto Balsemao, the Impresa owner) lose control of Impresa and so Impresa made a counterproposal: to buy BPI''s shares. This was possible because on owning 100% of SIC, Impresa would have SIC''s cash flow at its disposal. The case allows students to understand the reason why European banks are alienating their participations in companies that aren''t in the stock exchange market. Also students will understand the importance of shareholders agreements and the financial reasoning behind the set up of an operation that, at first sight, seemed impossible for Impresa. The use of multiples as a reference for evaluating a company value is widely employed in the case. From a pedagogical point of view it''s particularly interesting to note that the estimate value creation to the Impresa shareholders, originated by this finance operation, matched the valorisation of its shares in the following weeks.

Settings

Location:
Industry:
Other setting(s):
2009

Related