prepare a comprehensive report on this acquisition which addresses the following points:
1. What was the acquirer’s strategic rationale for the acquisition?
In order to provide a framework to your answer it may be worthwhile preparing a structural analysis based on Porter’s Five Forces model – but this is not compulsory.
2. How has the valuation of the target company been justified?
Prepare alternative calculations to indicate how you think that the company could have been valued and comment upon your valuations.
3. How did the acquiring company finance the bid and what was the rationale for this method of financing?
4. Was the acquisition carried out from a ‘friendly’ perspective or a ‘hostile’ perspective?
If ‘friendly’, suggest reasons as to why the target company’s executives had recommended the acceptance of the bid to the shareholders.
If ‘hostile’, suggest reasons as to why the bid was not recommended by the target company’s executives and provide indications of the defence tactics used by the target company.
5. Provide a consideration of the impact of the acquisition on the various stakeholder groups that will be affected by the acquisition.
6. What would you consider to be the major integration issues facing the new combined company? Will there be any (or was there any) major restructuring in terms of sell-offs of surplus parts of the new entity?
