...Nowadays many people conduct lengthy job hunts before arriving at a single offer. When two offers come along, job seekers can be taken aback, unsure how to proceed. Receiving multiple job offers can come as a surprise to employment seekers, and when faced between with two or more job opportunities It is always delicate to hesitate; and the decision is not easy to take. Nevertheless, it is very important to take a time to think which career opportunity is the better fit, given your career goals, needs, and wants. Sometimes the choice is clear, and an applicant will have no difficulty choosing one offer over another. However, in other cases, the compensation packages of two job offers could be similar and therefore cause dilemma. According a survey conducted in 2014, about employment factors, the statistic shows the most important employment factors when choosing jobs among workers worldwide in 2014 was salary, and financial incentives with 84%. But apart from the financial compensation there are many others incentives to consider before choosing a job. The first is advancement; during the survey, 62 percent of respondents said that opportunities for advancement would influence them to choose one job over another. Applicant should be looking to take the job that will advance them the furthest in their career. It’s important to capitalize on opportunities that move you forward in your professional growth and development. Secondly the hours and work-life balance. It is...
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...Joinees target is calculated based on the number of offers released the previous month. • The KPI of salary percentile is replaced with salary percentage. • Additional scoring: Offer of profile sourced/ER by recruiter will also be considered for the ratings though it is not mandatory. KPIs in Detail There are 4 ratings only Rating 1: Very Good Rating 2: Good Rating 3: Meets Expectation Rating 4: Needs Improvement Offers The offer target for the month would be based on the number of WIP positions with the recruiter in the beginning of the month* *in case the number of WIP positions in the beginning of the month is too low or many positions were cancelled during the month, the recruitment manager would decide the offer target for the recruiter. Rating 1: % of offers is greater than 85% of the WIP positions Rating 2: % of offers is greater than or equal 75% of the WIP positions Rating 3: % of offers is greater than or equal 60% of the WIP positions Rating 4: % of offers is less than 60% of the WIP positions Joinees The joinees target would be based on the offers released the previous month* *in case of any special cases the recruitment manager would define the joinee percentage required for a 3 rating. Rating 1: % of joinees is greater than 60% of the offers Rating 2: % of joinees is greater than or equal to 50% but less than 60% of the offers...
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...an IPO in July 2006 when Carlyle group, together with Clayton, Dubilier &Rice, and Merril Lynch Global Private equity , three prominent firms had filed to take the firm public. However this action has come just seven months after the three had combined to purchase Hertz from Ford Motor Company for Approx. $15 million. Berg, MD of Vandelay Capital Management debated whether to invest in this IPO.The LBO sponsors had borrowed an additional $1 billion on top of the buyout financing to pay themselves a special dividend in June 2006 , being the biggest reason why the IPO generated widespread criticism along with the speed with which the IPO was conducted . In the face of this criticism, the demand for the Hertz IPO weakened, and the offer price was reduced from the initial file price range of $16-$18 to just $15. Berg must assess whether at $15 per share, Hertz offers an attractive investment for this fund. After detailed analysis on the sponsors' returns on their investment and the attractiveness of the $15 offer price to public shareholders, along with the circumstances surrounding the IPO, it was concluded and advised not to invest. Reasons behind the IPO One of the obvious reasons behind the IPO was Hertz’s strong brand equity that gave it strong pricing power since it was ranked as the top worldwide general use car rental brand and one of the largest rental companies in the U.S and Canadian markets combined. Furthermore, the timing at which the IPO was taking place allowed...
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...Executive Summary This report analyzes RJR Nabisco company as a potentially candidate for leverage buyout. It focuses on the major problems and risk of RJR LBO and provides some recommendations for this case. RJR Nabisco began as a tobacco company in 1875, and the extent to establish food business. The main bidding group includes KKR, The Management Group and The First Boston Group. Several features of RJR Nabisco made it a particularly attractive LBO candidate. The factors leading to election of the lowest bid and major risks will be analyzed in this report. This report adopts Problem-Oriented Method to analyze the RJR Nabisco case study. Table of Contents Core theme for RJR Nabisco LBO 3 sub-theme for RJR Nabisco LBO 4 Major problems 4 Major risks 5 Conclusion: 6 Recommendations: 7 Reference: 7 Core theme for RJR Nabisco LBO RJR Nabisco exhibited steady growth which was unaffected by business cycle. Moreover, RJR had low capital expenditure and a low debt level. Therefore, the firm was a particularly attractive LBO candidate. RJR's problems appeared fixable. Between 1985 to 1988, the return of firm on asset declined from 15.5 per cent to 11.5 per cent. Moreover, inventory turnover fell from 10.0 to 3.9. For solve these problems, RJR had potential for value creation and used discounted-cash-flow methodology to determine value. The quality of the bidding team includes KKR, Management Group, and The First Boston Group, which is a...
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...BUS 330 Business Finance Online Final Examination Question 1: Chapter 11 Industries that generally perform well when other industries are performing well are referred to as: A. diversified industries. B. cyclical industries. C. risk-free industries. D. systematic risk industries Question 2: Chapter 12 Discuss how betas are measured for individual stocks. Betas are measured by plotting the historic returns of the stock against the market portfolio during the same period of time. Often times, another index is used instead of the market portfolio. The beta of the stock is the slope of the straight line drawn that best fits the observations of the plotted data. A slope of greater than 1.0 typically means that a stock’s returns are more volatile, while a slope of less than 1.0 typically means that the stock’s returns are less volatile than those of the market portfolio (or other index). Question 3: Chapter 13 The company cost of capital for a firm with a 65/35 debt/equity split, 8% cost of debt, 15% cost of equity, and a 35% tax rate would be: A. 7.02%. B. 8.63% C. 10.45%. D. 13.80%. Question 4: Chapter 14 When a firm issues 50,000 shares with a par value of $5 for $22 per share, additional paid-in capital will: A. decrease by $250,000. B. increase by $250,000. C. increase by $850,000. D. increase by $1,100,000. Question 5: Chapter 15 How do firms make initial public offerings and what are the costs of such offerings? When a firm makes an...
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...Rawat G13095 Vikram Bhatt G13116 A leveraged buyout (LBO) is when a company or single asset (e.g., a real estate property) is purchased with a combination of equity and significant amounts of borrowed money, structured in such a way that the target's cash flows or assets are used as the collateral (or "leverage") to secure and repay the money borrowed to purchase the target-company/asset. Since the debt (be it senior or mezzanine) has a lower cost of capital (until bankruptcy risk reaches a level threatening to the lender[s]) than the equity, the returns on the equity increase as the amount of borrowed money does until the perfect capital structure is reached. As a result, the debt effectively serves as a lever to increase returns-on-investment (ROI). The purpose of a LBO is to allow an acquirer to make large acquisitions without having to commit a significant amount of capital. A typically transaction involves the setup of an acquisition vehicle that is jointly funded by a financial investor and management of the target company. Often the assets of the target company are used as collateral for the debt. Typically, the debt capital comprises of a combination of highly structured debt instruments including prepayable bank facilities and / or publicly or private placed bonds commonly referred to as high-yield debt. India has experienced a number of buyouts and leveraged buyouts since Tata Tea’s LBO of UK heavyweight brand Tetley for ₤271 million in 2000...
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...the leveraged buyout of Scotts Company by a private equity firm, Clayton and Dubiler (C&D). Scotts Company was acquired from ITT. ITT was a global conglomerate with major holdings in Telecommunications, Entertainment, Insurance, and industrial products. The following is extracted from a brief history of IT (http://www.itt.com/_docs/news/pubs/itt-history-book-2011-eng-spread.pdf) ITT’s origins span more than one hundred years from the second industrial revolution to the computer age. During that time, the company expanded through acquisitions to become one of the world’s biggest businesses and then narrowed its focus to achieve a place as one of the top financial performers among multi-industry companies on Wall Street. We didn’t follow the crowd. Instead we created our own path and helped fine-tune the concept of a multi industry company that generates value from a shared management approach and synergies between our businesses. The following is extracted from C&D’s mission statement (http://www.cdr-inc.com/about/building_businesses.php): Question: C&D forced a number of changes on the Management Control System of Scotts. Some of these are discussed in the case: 1) Incentive Compensation, 2) Management Decision-Making Authority, 3) Monitoring and Advising Management. Why were these changes needed? O.M. Scott & Sons Company Leveraged Buyout Debt Covenants The organizational changes that Scott went through after the leveraged buyout were subtle, but...
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...UVA-F-1508 Rev. Oct. 5, 2009 THE BUYOUT OF AMC ENTERTAINMENT In July 2004, Sean Penmeyer, a principal at J.P. Morgan Partners (JPMP, the private equity arm of JPMorgan Chase & Co.), was in the midst of formulating the final terms of a public-to-private buyout proposal for AMC Entertainment Inc. (AMCE). Always alert for new investment opportunities, JPMP had invested in the theater industry before and had started a process earlier that year to learn more about the current state of the market. The interest was prompted by a gradual recovery in theater attendance since the recession and post–September 11 downturn. Big hits in 2002 and 2003 such as Spiderman, Finding Nemo, Lord of the Rings, and Matrix Reloaded had brought crowds back to the theaters and increased merger and buyout activity in the sector. Through various industry sources, Penmeyer had learned that AMCE might be looking for potential investors. On April 30, 2004, a senior partner at JPMP telephoned Peter Brown, chairman, president, and chief executive officer of AMCE, to gauge his interest in further discussions with JPMP. Earlier in the year, AMCE’s board had explored several opportunities to create value for shareholders. Those included acquisitions, strategic combinations with other theater companies, and a possible recapitalization of the company to simplify its capital structure. Several past investments, including a $250 million equity infusion by Apollo Management, L.P., in 2001, had left...
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...JOHN M. CASE COMPANY Mergers and Acquisitions OCTOBER 6, 2015 FINA 5513D - MERGERS AND ACQUISITIONS Syed Ali Ahmad (100978220), Long Thanh Dinh (100986227) Zeeshan Halim (100986227) Table of Contents Executive Summary .................................................................................................................. 2 Why the J.M.C. Company is an Attractive Target for the Firm’s Management ............... 3 Why purchase the J. M. C. Company by LBO ...................................................................... 4 Target Selection ...................................................................................................................... 4 Industry ................................................................................................................................... 4 Improve Operational Performance .......................................................................................... 5 Management Competence ....................................................................................................... 5 Valuation of the LBO................................................................................................................ 6 LBO Financing Structure......................................................................................................... 7 Ownership Retention ................................................................................................................ 8 Expansion...
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...Lindsey Bembry Leveraged Buyouts A leveraged buyout, LBO, is an acquisition of a company or a portion of a company with a considerable portion of loaned funds. The assets of the target company are used as collateral. Each leveraged buyout is unique in that companies have their own capital structure. The one characteristic that is common within each LBO is the use of financial leverage to complete the purchase of the target company. In order for a LBO to take place, an investor, private equity firms or financial sponsor is needed. In a typical LBO, the firm obtaining the company will finance the purchase with a mixture of debt and equity. A segment of the debt in a LBO is protected by the assets of the target company. New cash flows from the bought out business are then used to pay the debt from the buyout. Leveraged buyouts happen to companies of all sizes and in all different types of industries. However, some elements from possible target firms include; small debt loads, history of positive cash flows, a significant amount of tangible assets, the possibility of new management making improvements, and for valuation/stock price to be minimal. Debt financing is borrowing money from a source with the intent to pay back the principal plus an agreed upon interest. An advantage of debt financing is those who use it can maintain ownership. Corporate balance sheets typically use principal and interest payments as a business expense which can be deducted from income...
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...become a private equity takeover target. The maker of Bonds undies, Berlei bras, Sheridan sheets and Dunlop, among other well-known brands, has been approached by US-based investment firm Kohlberg Kravis Roberts. It's the latest in a string of buyout offers for listed companies that have seen their share prices hit by market jitters and an exodus of investors from struggling industries. Business reporter Michael Janda reports. MICHAEL JANDA: Private equity firms are the predators of the investment world, looking for weak companies they can buy on the cheap and turnaround before selling them on to someone else, or floating them on the share market. Katherine Woodthorpe is the chief executive of the Australian Venture Capital and Private Equity Association. KATHERINE WOODTHORPE: The bottom line is that they see a company that they believe they can double the value of in a period of something like three to five years. MICHAEL JANDA: The latest firm to join the list of targets is Pacific Brands. It confirmed this morning that it's been approached by the US-based investment firm Kohlberg Kravis Roberts, but it says negotiations are ongoing and there's no certainty of an offer even being made. If a successful offer is forthcoming it would be a return to private ownership for Pacific Brands, which was floated by its previous private equity owner CVC for $2.50 a share in 2004. At yesterday's close and prior to reports of KKR's approach, Pacific Brand shares...
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...An Important Juncture As a member of the Halley family and the chairman of one of the top French retailers, Promodes, Paul-Louis Halley witnesses the $16.6 billion takeover of his family’s firm by its long time competitor Carrefour, on January 25th, 2000. This merger, prompted by growing threats from foreign retailers, will establish Carrefour as the top European retailer. Although these two firms have a long history of rivalry and competition, this move would be the obvious choice. Despite having put aside their differences, “the marriage was clearly an externally driven affair.” (4) Months earlier, in June of 1999, Wal-mart expanded its european holdings with a $10 billion investment used to take over ASDA of Britain. The two french retailers, having themselves nearly been targeted for acquisition by Wal-mart in recent years, are very much aware of the growing threat that the world’s top retailer poses, especially in light of prior competition with the mega corporation throughout previous decades. Analysts have predicted that such a merger would take place between two major European retailers. To do so is to increase economies of scale for the newly merged. With a swap of 6 Carrefour shares for each of Promodes’, a total stock market value of 49 billion euro has been achieved, which despite still being much smaller than Wal-mart’s $200 billion (1), may be enough to hold the American retailer off, as Carrefour still controls a greater portion of the local market. Although...
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...Clear Channel Communications Case 1. Evaluate the sales process that led to the 37.60 offer. Did the sales process followed by the Board and the Special Advisory Committee maximize the offer price? What else should have been done, if anything, to increase the offer price? • In 2006 Mark and Randall Mays approached Goldman Sachs to discuss several options for the proposed sale of Clear Channel Communications. Options included a leveraged buyout, a complete spinoff of CCO, and/ or the sale of certain assets such as rural-market radio stations and all of its television stations. • The LBO came to the forefront and the Randalls met with private equity firms Blackstone and Providence Equity. Blackstone and Providence presented a bid as a consortium to buy Clear Channel for $34 per share. The independent board of directors swiftly rejected the price as they felt it was not adequate. Blackstone and Providence then indicated they might be willing to increase their bid to 35.50. Soon after private equity firms Thomas H Lee Partners expressed interest in bidding along with Bain Capital and TPG to form a competing consortium. Two more consortiums also had come together Apollo Management and the Carlyle Group, and Cereberus Capital Management and Oak Hill Capital Management. • Each consortium separately proposed a price of $ 36.50 per share. The board felt the bids were too similar to each other to choose and requested they improve their share price. In November 2006 the consortium...
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...Raymond Britton FIN-660 Case Study: RJR Nabisco March 22, 2015 The RJR Nabisco Leveraged Buyout (LBO) case study analyzes the history prior to the LBO and the post LBO corporate organization. RJR Nabisco was not performing well prior to the LBO. Financial analysis’s also implies that the shareholders of RJR Nabisco profited from Kohlberg Kravis & Roberts winning LBO bid. (Gaughan). To define a leveraged buyout or LBO, it is “a financial procedure used by a many business entities, including the management of a corporation or outside groups, such as other corporations, partnerships, individuals, or investment groups” (Gaughan). An LBO is the acquisition of another company where borrowed money is used to meet the cost of acquisition. This type of transaction allows firms to have the capability to achieve large acquisitions without obligation of having to disperse a lot of capital. LBO’s make it possible to and provide the ability to obtain less significant firms with very little capital and the attained business can take advantage from the re-organization. Additionally, LBO’s can possibly experience aggressive takeovers to the assimilated firm due to the reorganization and downsizing which can and may have a significant disruptive impact on the acquired firms workforce as well as a conflict of interest between personnel and management. The popularity of tobacco continued into the 1900’s which RJR projected and in 1913 launched four new tobacco products within...
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...This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Mergers and Acquisitions Volume Author/Editor: Alan J. Auerbach, ed. Volume Publisher: University of Chicago Press Volume ISBN: 0-226-03209-4 Volume URL: http://www.nber.org/books/auer87-1 Publication Date: 1987 Chapter Title: The Growth of the "Junk" Bond Market and Its Role in Financing Takeovers Chapter Author: Robert A. Taggart, Jr. Chapter URL: http://www.nber.org/chapters/c5819 Chapter pages in book: (p. 5 - 24) 1 The Growth of the “Junk” Bond Market and Its Role in Financing Takeovers Robert A. Taggart, Jr. 1.1 Introduction “Junk” bonds, as they are popularly called, or “high-yield’’ bonds, as they are termed by those wishing to avoid pejorative connotations, are simply bonds that are either rated below investment grade or unrated altogether.’ Fueled by the introduction of newly issued junk bonds in 1977, this segment of the bond market has grown rapidly in recent years and now accounts for more than 15 percent of public corporate bonds outstanding. However, the growth of junk bond financing, particularly in hostile takeover situations, has been bitterly denounced. For example, Martin Lipton, a merger specialist with the firm of Wachtell, Lipton, Rosen, and Katz, has argued that junk bond financing threatens “the destruction of the fabric of American industry” (Williams 1984). In a similar vein, twelve U.S. senators signed a letter in support...
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