...JFT2 Task 1 Bill Bailey When presented with the idea of a merger between the Salt Lake Symphony and the Opera, Bill Bailey and the opera trustees expressed concerns about the financial standing of the two organizations with the opera being financially stable and could be flexible in size, number of performances offered, number of full time staff and fundraising events. On the other hand the symphony, a 52 week orchestra employing 33 full time staff and 83 musicians which along with a loss in funding left the symphony facing some financial challenges. It appeared to Bill Bailey that the symphony would be gaining much more from the merger than the opera and the only apparent benefit for the opera would be to become a tier-one arts organization but at the risk of losing its established identity. Bill could use Adam’s Equity Theory of Motivation to represent how this merger will not benefit the opera or its board and possibly hurt future operations. Adam’s Equity Theory of Motivation is one based on fairness and justice and the consequences of events that cause feelings of inequity or injustice. There are two components to this theory. First is the input, meaning what an employee provides for which a just return is expected for the efforts. Second is the output, meaning pay, bonuses, benefits and job security. Because people’s personalities vary each individual or group will evaluate events as either a positive or negative inequity when comparing outcomes with other involved...
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...1. Introduction Freeport-McMoRan also called Freeport or FCX in New York Stock Exchange, operates in exploration, mining and refining of ore containing copper, gold and silver. Freeport’s synergy in creating the world’s largest publicly traded natural resources was initiated through the merger and acquisition (M&A) transactions. Investment banks, J.P. Morgan and Merrill Lynch play a key role as a financial assistance to advice Freeport in the merger and acquisition transactions. On November 19, 2006, media announced that Phelps Dodge (PD) is to be acquired by Freeport. This opportunity will eventually benefit Freeport in the future growth, given that PD is known as world’s leading producer of molybdenum-based chemicals and continuous-cast copper rod. In the case study of Freeport-McMoRan in financing an acquisition, several questions will be discussed including the events, which lead to the merger transaction following the analysis of operating and financial performance as well as the involvement of J.P. Morgan and Merrill Lynch prior to the acquisition announcement. 2. Question 1 a. During the year of 2006, a tumultuous series of events occurred before the acquisition of Phelps Dodge by Freeport-McMoRan on November 19, 2006, concerning M&A landscape in the US mining industry. The events emerge from the implementation of a poison pill, which hostile and non-hostile companies fight to win the M&A transaction of the target company. Phelps agreed to acquire...
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...the company were gripped with. The purpose of this paper is to analyze the financial statements of WorldCom and determine whether these statements foreshadowed the troubles ahead. WorldCom was a successful telecommunications company with its history dating back to 1983. It started out as small long distance calling service provider called Long Distance Discount Service (LDDS) in 1983. Bernard Ebbers was one of the early investors in the company and 1985 became the chief executive officer of the company (Pandey & Verma, 2004). Under his direction, the company acquired Advantage Companies in 1989 and became a publically traded company. The company expanded through mergers and acquisitions, the $40 billion merger with MCI Communications Corporation was the biggest in history at that time (Uknown, 2002). After this merger, the company named itself WorldCom and was operating in more than 65 countries around the world providing telecommunications, fiber optic, data transfer, networking, website management, wireless and a broad range of other services (Pandey &...
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...www.ccsenet.org/ijef International Journal of Economics and Finance Vol. 2, No. 4; November 2010 Measuring Post Merger and Acquisition Performance: An Investigation of Select Financial Sector Organizations in India Dr. Neena Sinha Associate Professor, University School of Management Studies Guru Gobind Singh Indraprastha University, Kashmere Gate, Delhi, India Tel: 91-98-1805-6810 E-mail: dr_neenasinha@yahoo.com Dr. K.P.Kaushik Professor, National Institute of Financial Management Sector-48, Pali Road, Faridabad-121001, India Tel: 91-93-1236-0874 E-mail: kp_kaushik@hotmail.com Ms. Timcy Chaudhary (Corresponding Author) Research Associate, University School of Management Studies Guru Gobind Singh Indraprastha University, Kashmere Gate, Delhi, India Tel: 91-98-1856-8903 Abstract E-mail: timcy9@gmail.com The present paper examines the impact of mergers and acquisitions on the financial efficiency of the selected financial institutions in India. The analysis consists of two stages. Firstly, by using the ratio analysis approach, we calculate the change in the position of the companies during the period 2000-2008. Secondly, we examine changes in the efficiency of the companies during the pre and post merger periods by using nonparametric Wilcoxon signed rank test. While we found a significant change in the earnings of the shareholders, there is no significant change in liquidity position of the firms. The result of the study indicate that M&A cases in India show...
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...RJFT Task 1 Utah Symphony and Utah Opera: A Merger Proposal Unlike major arts organizations in Europe and Canada that rely heavily on government agencies for their funding, orchestras and opera companies in the United States operate under a very different financial model. Income to support these organizations is generated primarily through ticket stales (approximately 46%) and individual contributions (approximately 36%) (Alexander, 2004). Since September 11, 2001, all arts organizations in this country have experienced a dramatic decline in public and government subsidies that has led to major loss of revenues for many of them. As a result, several arts organizations have made the decision to merge. To gain a better understanding of positions for or against the merger of the Utah Symphony and Utah Opera, I have explored motivations of various constituents. Below is a summary for use by Anne Ewers to think through potential issues that may arise during the merger process. Although the Utah Opera Organization’s Chairman of the Board, Bill Bailey supports the merger with the Utah Symphony, there is some hesitation on his part. Currently the Utah Opera Organization is financially stable, however its’ continued viability could be in jeopardy due to a decline in support of the arts (both private and public) possibly due to a negative overall world economic climate. To encourage the support of the Utah Opera Organization’s principals and constituents, Mr. Bailey could...
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...It also had a 9% share of the 200 million hand saws and saw blades market with excellent brand & quality. It had a very effective and large distribution system across US, Canada and overseas. Cooper industries believed that Nicholson can achieve 6% annual sales growth as also bring down the cost of goods sold from 69% to 65% and selling and administrative expenses from 22% to 19% , thereby increasing its profitability. Cooper would be able to use Nicholson’s distribution system to cross sell Cooper’s hand tool lines in the industrial and consumer markets. Cooper anticipated that the Nicholson acquisition would lessen its earnings volatility and currently Nicholson is in the merger market to stave off the raid by H K Porter Company. 1/5 Valuation of Nicholson File (without merger) Please see Exhibit -1 and Exhibit -3 for details and assumptions Assuming that Cooper will continue to have sales growth equal to 2 % with cost of goods sold at 69% of the net sales, its market price will stay in the ($19 to $27 range in 1972) and ($22 to $31 in 1976) because of the operating in-efficiencies and lower profit margins (3% to 4 %) as also the un-certain ownership...
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...RJFT: Task 1 Illustrate how Bill Bailey, chairman of the board of the Utah Opera Organization, might use one theory of motivation to oppose or support the merger: As Chairman of the Board of Utah’s Opera; Bill Bailey may feel positive about the possible merger between the Opera and the Utah Symphony but may consider employing the motivating principles of Victor Vroom’s “Expectancy Theory,” to ensure the success of this endeavor. Although the Opera may have historically been the more financially solvent and flexible organization between the two, it would be in his best interest if he recognized that according to the principle, “people are motivated to behave in ways that produce valued outcomes” (Kreitner & Kinicki, 2010, p.223). One of the key components of the theory; Valence, or a positive value that would be perceived by all involved in the merger, would be the overall improved status of everyone if both organizations were combined. Another concept of Vroom’s model, Expectancy is defined as, “the belief that effort leads to a specific level of performance” and according to the text, “there are several factors that influence those perceptions (Kreitner & Kinicki, 2010, p.224). Three poignant factors are; “Help received from a supervisor and subordinates, Self-esteem and finally, Good materials to work with” (2010, p.224). Addressing the first factor; being Chairman of the Board of the opera, Bill Bailey is the supervisor to many and by being seen physically present at...
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...Risk of investing RTO • Influence of the interest groups • To identify the issue of investing RTO based on different perspectives 1. Reverse Mergers (RTOs) Defined & Current situation: “A reverse merger (RTO) is a transaction in which an unlisted private operating company becomes public via a merger with a publicly traded shell company, which is generally a company with no material business operations.” (SEC Approves New Exchange Rules to Toughen Listing Standards for Reverse Merger Companies) Beginning in 2007 and continuing into the present, more than 150 Chinese companies have obtained listings on both U.S. and foreign stock exchanges via reverse mergers (RTOs). 2. The structure of RTO (Coming to America) • Matchmakers in China and the U.S. connect businesses in China with American ailing or shell companies and propose a merger • The under writer hires an auditor to prepare the financial statements required for the merger to be approved by the SEC • Once the merger is approved, the company is renamed. Often the names contain the word "China" or "Sino". • The company builds up credibility and moves up to a well-known exchange such as Nasdaq • The company works with an investment bank to sell shares. Analysts catch on, investors start paying attention, and funds buy the stock, all moving the price. 3. Why a reverse merger rather than an IPO? • Reduced time and costs to secure public listing Take US stock exchange as example: A firm can avoid having to...
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...Merger: Valuation Process and Evaluation of Financial Performance in case of United Insurance Company and Shama Plc By: Jemaneh Bayou January 2008 Advisor: Abebe Yitayew (Asst. Professor.) A PROJECT PAPER SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES OF ADDIS ABABA UNIVERSITY IN PARTIAL FULFILLMENTS OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN ACCOUNTING AND FINANCE ADDIS ABABA UNIVERSITY SCHOOOL OF GRADUATE STUDIES Faculty of Business & Economics Department of Accounting & Finance Merger: Valuation Process and Evaluation of Financial Performance in case of United Insurance Company and Shama Plc By Jemaneh Bayou Hailu January 2008 Approved by board of examiners Asst. Professor Abebe Yitayew Advisor Examiner ___________________ Signature ___________________ Signature Examiner ___________________ Signature Statement of Certification This is to certify that Jemaneh Bayou has carried out his project work on the topic “Merger: Valuation Process and Evaluation of Financial Performance in case of United Insurance Company and Shama Plc” under my supervision. In my opinion, this work qualifies for submission in partial fulfillment of the requirements for the award of Degree of Masters of Science in Accounting and Finance. Signature________________ Abebe Yitayew (Asst.Professor) Project Advisor Statement of Declaration I declare that this project work is my original work. It has not been submitted for any degree/Diploma in any University. I have undertaken...
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...executive offices) 91-1141254 (I.R.S. Employer Identification Number) 97227-1733 (Zip Code) (503) 331-7270 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, Par Value $0.005 Per Share Name of Each Exchange on Which Registered The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None. (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted...
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... say, cash or equity, for the Korean mergers and acquisitions during 1996-2008 in which for some period, say, 1996-2000, liquidity is very scarce and market is uncertain. We test two hypotheses; first, whether equity payments reduce bidders’ firm value; second, whether cash payments are more (or less) likely preferred by the target shareholders who are facing high uncertainty. Unlike US experience, we fail to find statistical evidence that equity offers reduce bidders’ firm value. Further, while the bidder shareholders gain on average wealth of 1.8% from the M&A transactions, whether they pay in cash or equity, they earn positive 0.1% or 3.5% gain, respectively. These results contradict to the conventional asymmetric information model where market valuation of bidder’s equity plays an important role for the determination of payment alternatives. While examining the wealth gains of target shareholders, we find statistical evidence that cash payments are preferred to equity payments. Further, if they are paid by cash (equity), they earn 6.2% (-5.1%) gain. We conclude that under the liquidity-scarce and uncertain situation, cash is king! Sellers prefer cash rather than taking risk for future higher return. The use of buyer cash would attract more sellers. Buyers prefer equity payments not because of their equity’s overvaluation (conventional model), but because of their cash saving for their lucrative takeovers. Key words: acquisition, merger, payment methods, means of payment,...
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...Management Research Report What has British Airways done during the recession to be competitive against Ryanair and Easyjet? Table of Contents 1. Introduction ………………………………………………………………………………………………….. 3 2. Methodology …………………………………………………………………………………………………. 4 3. Short History 3.1 British Airways ……………………………………………………………….……………………5 3.2 Easyjet and Ryanair………………………………………………………………………………..6 4. Prior to the Recession 4.1 British Airways ……………………………………………………………………………………..7 4.2 Easyjet …………….………………………………………………………………………………...8 4.3 Ryanair ……………………………………………………………………………………………... 9 5. Recession and Airline Industry 5.1 Impact of current recession on the airline industry …………………………………………….. 10 5.2 Impact of recession on British Airways …………………………………………………………... 11 5.3 Impact of recession on Easyjet and Ryanair …………………………………………………….. 16 6. The Strategies implemented by British Airways 6.1 Strategies implemented to compete against Easyjet and Ryanair……………………………… 18 7. Recommendation ……………………………………………………………………………………………… 23 8. Conclusion ……………………………………………………………………………………………………... 24 9. Reference and bibliography……………………………………………………………………………………. 25 1. Introduction This report will focus on the current economic crisis and the effect it has had upon British Airways. The passenger figures at London Heathrow, Gatwick, Standsted and other major airports have dropped by 7.4 per cent last...
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...Presenter Notes Slide 1 – Introduction Slide 2 – Explain the competing values framework: Used in the completion of a cultural assessment of an organization. The horizontal dimension maps the degree to which the organization focuses inwards or outwards (Cameron, 1999). To the left, attention is primarily inwards. To the right, it is outwards. The vertical axis determines the decision-maker. At the lower end, control is with management. The upper end indicates control with employees who have been empowered to decide for themselves (Cameron, 1999). 4 hierarchies explained: Hierarchy – 1. Traditional approach to structure and control that flows from a strict chain of command. 2. For many years, considered the only effective way of organizing and is still a basic element of the vast majority of organizations. 3. Leaders are typically coordinators and organizers who keep a close eye on what is happening. Market – 1. Seeks control by looking outward with particular notice of the transactions cost. 2. Not focused solely on marketing but views transactions as exchanges of value. 3. Leaders are often hard-driving competitors to who seek to always deliver the goods. Clan - 1. Less of a focus on structure and control and a greater concern for flexibility. 2. People are driven through a shared goal and outcome. 3. Leaders act in a facilitative and supportive way. Adhocracy – 1. Greater independence and flexibility than the Clan which is necessary...
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...8-K 1 d949178d8k.htm FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 23, 2015 LOGO Kraft Foods Group, Inc. (Exact name of registrant as specified in its charter) Virginia 1-35491 36-3083135 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) Three Lakes Drive, Northfield, IL 60093-2753 (Address of principal executive offices, including zip code) (847) 646-2000 Registrant’s telephone number, including area code Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230-425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers...
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...operating performance as a result of acquisition in banking industry Aarhus School of Business, Aarhus University May 2011 Table of Contents 1. Introduction................................................................................................................ 1 1.1. 1.2. 1.3. 1.4. 2. Problem statement................................................................................................ 3 Definitions and clarifications ............................................................................... 3 Delimitations ....................................................................................................... 4 Evaluation of sources ........................................................................................... 4 Literature review ........................................................................................................ 5 2.1. 2.2. 2.3. Mergers and acquisitions activity in recent years .................................................. 5 Overview of efficient market hypothesis .............................................................. 7 Abnormal operating performance ......................................................................... 9 3. Event study approach ............................................................................................... 12 3.1. 3.2. Event study technique ........................................................................................ 12 Test statistics ..................
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