FIN 679 AU Advanced Corporate Finance Questions

Merger and Acquisition Valuation Plan

You will prepare a report that will provide an analysis of the pre-and post-merger valuation strategies used in merging or acquiring your selected target company.

You will support your findings and recommendations with evidence from at least four scholarly and/or professional sources in addition to the required annual reports. Be sure to include any links to professional websites used as references or to access company information.

The completed report must include the following elements.

• Refer to the work you completed in the Weeks 2 and 3 assignments (attached), and summarize the company profiles you created for both the selected acquiring company and the selected target company. Within the company profiles, assess each of the organizations’ values, and include a summary of the financial statements of both companies for the last three years, explaining their strengths and weaknesses. Incorporate any pertinent revisions to your original work based on instructor feedback.

• Analyze strategic alternatives to mergers and acquisitions, and explain why the acquiring company would choose to combine forces with the target company instead of remaining independent.

• Utilize ethical and professional standards, and explain the various types of synergies that the acquiring company may anticipate this merger or acquisition will create.

• Explain the role of the premium in this merger or acquisition valuation.

• Apply appropriate principles of valuation to both the acquiring and target companies. Analyze various business valuation techniques, and explain what would make a merger or acquisition a positive Net Present Value (NPV) project for the acquiring company.

• Explain what you could learn from the market’s reaction to this acquisition announcement.

• Implement a strategy for integration and restructuring.

• Explain what your earnings per share will be after the merger, and recommend techniques to minimize tax consequences.

• Explain what your earnings per share will be after the merger, and recommend techniques to minimize tax consequences.

• Execute a no premium strategy to buy the target company.

• Execute an offer of an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy the target company.

• Explain how shareholders could reduce their losses from the coinsurance effect in relation to the planned merger or acquisition.

• Explain how the merger or acquisition could benefit the shareholders.

The Merger and Acquisition Valuation Plan

•