...Conral CSX case Executive Summary Conrail has received two acquisition bids from CSX and Norfolk Southern. Introduction Conrail and CSX, the nation’s first and third largest railroads, have decided to participate in a merger of equals. CSX has offered to acquire Conrail in a two tiered deal. The first 40% of tendered Conrail shares will be bought at a price of $92.50 while the remaining 60% will be acquired through a stock swap at a ratio of 1.8561921 (CSX:Conrail). In the midst of this offer, a hostile Bid comes in from Norfolk Southern, a competitor in the Industry. Norfolk Southern offers ____ Analysis Case A, Question 1: Why is CSX interested in Conrail? How much should CSX pay for Conrail? The Stagger’s Rail Act of 1980 has created a deregulated environment in which acquisitions are used to improve the competitive positioning of existing companies within the railroad industry. CSX is interested in Conrail for a couple of reasons. Primarily, CSX would like to acquire Conrail because its routes are complementary to their own, allowing the combined company to provide “long-haul, contiguous, and therefore low-cost service between the Southern, Eastern, and Mid-Western parts of the United States.” Additionally, CSX’s acquisition of Conrail would prevent the company’s main competitor Norfolk Southern from gaining access to routes in the Northeastern United States. This would leave Norfolk Southern at a large strategic disadvantage. Lastly, the...
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...Executive Summary Conrail has received two acquisition bids from CSX and Norfolk Southern. Introduction Conrail and CSX, the nation’s first and third largest railroads, have decided toparticipate in a merger of equals. CSX has offered to acquire Conrail in a two tiereddeal. The first 40% of tendered Conrail shares will be bought at a price of $92.50while the remaining 60% will be acquired through a stock swap at a ratio of 1.8561921 (CSX:Conrail). In the midst of this offer, a hostile Bid comes in fromNorfolk Southern, a competitor in the Industry. Norfolk Southern offers ____ Analysis Case A, Question 1: Why is CSX interested in Conrail? How much should CSX payfor Conrail? The Stagger’s Rail Act of 1980 has created a deregulated environment in whichacquisitions are used to improve the competitive positioning of existing companieswithin the railroad industry. CSX is interested in Conrail for a couple of reasons.Primarily, CSX would like to acquire Conrail because its routes are complementaryto their own, allowing the combined company to provide “long-haul, contiguous,and therefore low-cost service between the Southern, Eastern, and Mid-Westernparts of the United States.” Additionally, CSX’s acquisition of Conrail would preventthe company’s main competitor Norfolk Southern from gaining access to routes inthe Northeastern United States. This would leave Norfolk Southern at a largestrategic disadvantage. Lastly, the combination would provide cost synergies andreductions, even...
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...motor and tire technologies, the trucking industry began gaining significant market share of the freight transportation business from the rail road companies. As a result, the six largest railroads in the Northeast filed for bankruptcy. In response to the failures, the Congress passed the Stagger’s Rail Act of 1980 in order to deregulate the railroad industry, which resumed the mergers and acquisitions activity. The following analysis will investigate the economics of the offer for Consolidated Rail Corporation (Conrail) by CSX Corporation (CSX) and Norfolk Southern Corporation (Norfolk). The stand-alone bidders, CSX and Norfolk would value the target, Conrail, based on its fundamentals, however if both bidders are present they would enter price wars and legal battles, therefore this would inflate the offered price for the target. In particular the acquirers have to take into account of the opportunity cost of losing the bidding war (i.e. losing significant proportion of their revenue going forward) as calculated in Question 3. According to our analysis, the value of...
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...packet. You should use the detailed questions given in the course packet to organize your thoughts and analysis about the case. Our class discussion will cover the issues raised by the questions, i.e.: (i) What capital structure makes sense? (ii) What would be the best way to disburse cash? (iii) Describe the advantages and disadvantages of each alternative considered by management? In addition to reading and analyzing the Intel case, you should come to class with a one to two page memorandum that summarizes your analysis. You may team up with one or two classmates and hand in one memorandum for the group. (I.e., I will accept a memorandum with up to, but not more than, three names on it.) Stern School of Business New York University Cases in Corporate Finance Marciano Tony Course Syllabus TENTATIVE I. Course Materials A. Packet I (Required): 1. Syllabus 2. Assignments 3. Cases 4. Readings B. Text (Very Highly Recommended but probably have it already): Brealey Myers Allen, Principles of Corporate Finance, McGraw Hill. (BM) You may already have this text. C. There will be some miscellaneous handouts during the course. AND THERE ARE FILES ON BLACKBOARD WHICH CONTAIN SPREADSHEETS FOR THE CASES WE WILL ANALYZE IN THE COURSE. EACH SPREADSHEET CONTAINS ONE OR MORE OF THE EXHIBITS IN THE CASE. THIS WILL MAKE IT EASIER FOR YOU TO SPEND TIME ON THE ANALYSIS, RATHER THAN PUNCHING IN NUMBERS. II. Course Objectives This course will use the case method to...
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...experiencing slow consistent growth. For companies in this industry, it implies tightened operations and good human resource management are essential for success. The industry incumbents benefit from high barriers to entry due to the amount of capital requirements. Substitutes play a moderate role in the industry, while buyers and suppliers are on neutral ground with the railroads. Lastly, rivalry varies from area to area, but is average as a whole. This is shown in the analysis of captive versus noncaptive customers. Union Pacific mainly transports commodities in five primary industries; agriculture, automotive, chemical, energy, and industrial. These customers look for competitive pricing, on time delivery, and good customer service. In order to be successful in this industry, a railroad must have the resources to serve all the needs of these customers. Since Union Pacific operates west of The Mississippi, its main competitor is Burlington Northern Santa Fe which also operates in this region. At times they also compete with CSX and Norfolk Southern in intermodal transportation. At other times they are the only railroad servicing an area. The amount of power they have depends on the competitive atmosphere within each unique environment. Union Pacific...
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...The Resilience of the Railroad Industry Lindsay Millar, Jessica Settlecowski & Mike Gawel MGT 674 March 23, 2013 The history and resilience of the railway industry is rather remarkable as it has helped shape the landscape and the formation of the United States. Railways allowed colonies to settle in the West and the country suddenly became connected from coast to coast. This encouraged the exchange of goods and stimulated the development of towns and communities along track lines. Soldiers were shipped directly to the forefront of battleground lines and supplied with a constant flow of ammunition. Most importantly, trains were the steam engine that fueled the industrial revolution. The railway industry’s history is rich with experience and wise with age, as it has survived many seemingly insurmountable obstacles, including: the Great Depression, civil war, the advent of automobiles and airplanes and federal regulation. Federal regulation took the largest toll on the industry as it restricted the ability of the industry to adapt to future demands and market requirements. The growth of rail was stunted by 100 years of federal regulation and since the Staggers Act of 1980 which led to deregulation, the industry has been struggling to recover. After the implementation of the Staggers Act the industry has undergone serious reconstruction which has increased the overall performance and reliability of rail. As service levels improve the demand for low rates and large capacity...
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...The Rise of Emerging Markets in Mergers and Acquisitions Developing countries are gaining strength and influence T he rise in the number of mergers over the past five years has been dramatic. Unlike previous merger waves, however, companies in emerging markets are playing an increasingly important role. Indeed, while the number of majority acquisitions increased globally by 6 percent, acquisitions of established companies by emerging firms grew at an annual rate of 26 percent. Although their motives differ from traditional M&A activity, it is clear that, in the near term, emerging competitors present a potential threat to companies in developed countries. Mergers and acquisitions have become a staple of newspaper headlines. Although most M&A activity is initiated by companies in the developed world, a recent A.T. Kearney study of global M&A reveals that a paradigm shift is occurring: Beginning in 2002, deals between developing and developed countries grew at an annual rate of 19 percent— far in excess of the industry average and four times faster than deals conducted within either developing or developed countries alone (see figure 1 on page 2). While not large in absolute terms, this rate of growth indicates how rapidly the developing world is catching up in the M&A business. In fact, the study found that companies from developing countries such as China, India, Malaysia, Russia, the United Arab Emirates and South Africa are snapping up established...
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...JS 5/1/2013 POLS 3315-001 Party Issue Valuations and Reassessments Why do political parties in the United States abandon or revisit specific issues? Moreover, what is the driving force behind a party making an issue politically salient? Some examples that could be correlated with these questions could be why the Republican Party has stayed silent on issues that many old-guard Democrats feel is contentious in the current administration, why the sudden recent ideological transformation of conservative party, or why many politicians steer clear from Wall-Street related subjects (even though lashing out against bankers these days is sure to garner some attention, and most likely support from the general public). All of these examples and more will be discussed in order to provide a sufficient answer as to why issues are left behind in the dust or put out prominently on display. There are numerous factors and variables to consider when trying answering such a question, one of which could be racial factors. It’s been largely documented that Latinos have been an increasingly growing electorate, going from 1 percent of voters from the 1950s to over 11% in the twenty-first century (Abramowitz 27). With this information in mind, it would make sense that the Democratic establishment is today trying to initiate immigration reform in the United States Senate, knowing that they’ll have an increasing amount of support from their Latino electorate. It should also be noted that although...
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....................................................................................................................... Ernest G. Cravalho Chairman, Undergraduate Thesis Committee Department of Mechanical Engineering Standup and Stabilization of the Inverted Pendulum by Andrew K. Stimac Submitted to the Department of Mechanical Engineering on May 5, 1999, in Partial Fulfillment of the Requirements for the Degree of Bachelor of Science in Mechanical Engineering. Abstract The inverted pendulum is a common, interesting control problem that involves many basic elements of control theory. This thesis investigates the standup routine and stabilization at the inverted position of a pendulum-cart system. The standup routine uses strategic cart movements to add energy to the system. Stabilization at the inverted position is accomplished through linear state feedback. Methods are implemented using the Matlab Simulink environment, with a dSPACE DSP controller board for...
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...QUESTION ONE. Maximisation of shareholders wealth is the main objective of a firm. Given that corporate ownership and control are often separated, is this a realistic goal? Shareholders are the owners of a corporation. The goal of a corporation is to maximise shareholders wealth, which sounds reasonable, since the owners (shareholders) want their company to be profitable. This goal was not an issue when the owners of the corporation were also the managers. However in the present day, corporate ownership has become increasingly diffused and while the shareholders may own the corporation, they do not run it. Rather a board of directors are elected who then appoint managers to oversee the day to day running of the company. This is called a separation of ownership and management and represents one distinctive feature of a corporation. In theory most financial managers would agree with the goal of maximising wealth for the owners of the corporation. In practice however, it could be suggested that managers are also concerned with their personal wealth, job security, lifestyle and other benefits such as golf club memberships, company vehicles and impressive offices all provided at company expense. Such concerns may make managers reluctant or unwilling to make decisions that while it may increase the owner’s wealth, may result in the loss of their job and damage to their personal wealth. This compromise between management’s personal goals and owner maximisation produces a less-than...
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...shockingly labeled “IT Doesn’t Matter,” has garnered the magazine more buzz than at any time since Jack Welch affair. The article has been approvingly cited in The New York Times, analyzed in Wall Street reports, and e-mailed around the world. But without such a dramatic and reckless title, I doubt the article would have been much noticed. It’s a sloppy mix of ersatz history, conventional wisdom, moderate insight, and unsupportable assertions. And it is dangerously wrong. Author Nicholas Carr’s main point is that information technology is nothing more than the infrastructure of modern business, similar to railroads, electricity, or the internal combustion engineering advances that have become too commonplace for any company to wangle a strategic advantage from them. Once-innovative applications of information technology have now become merely a necessary cost. Thus Carr thinks today’s main risk is not underusing IT but overspending on it. But before we get any further, let’s have a reality check. First, ask Jeff Immelt, the CEO of General Electric Co., one of the premier business corporations in the world, this question: “How important is information technology to GE?” Here’s his answer: “It’s a business...
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...Fair and Square Retail Strategic Analysis: JC Penny Professor Maria Kalamas MKTG 4300/01 Basic Retailing- Spring 2012 Team Shopaholics Anonymous Vaughan Alexander | Marshall Gingles | Sean Lehnherr | Aftiam Ramli | Juan Torres Table Of Contents Introduction 01 Multipart Analysis of the Retailing Mix Customers 04 Customer Service 05 Merchandise 07 Logistics 09 Price 11 Advertising & Promotion 12 Trading Area & Site Selection 13 Store Layout & Design 14 Retail Strategic Plan Controllable & Uncontrollable Variables 18 Global Retailing 20 Positioning & Differentiation 20 Strategic Direction 21 Executive Summary 22 Appendices & References 24 In 1902 founder and one time CEO James Cash Penney opened a small dry goods store in Kemmerer, Wyoming named The Golden Rule. 110 years later this once small business manager grew a company we now know as JCPenney, which has flourished into a nationwide retail department store with over 1100 store locations throughout the United States. Throughout the years JCPenney has changed an adapted to the retail market. It wasn’t till...
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...Issues in Supply Chain Management Douglas M. Lambert Martha C. Cooper Successful supply chain management requires cross-functional integration and marketing must play a critical role. The challenge is to determine how to successfully accomplish this integration. We present a framework for supply chain management as well as questions for how it might be implemented and questions for future research. Case studies conducted at several companies and involving multiple members of supply chains are used to illustrate the concepts described. © 2000 Elsevier Science Inc. All rights reserved. INTRODUCTION One of the most significant paradigm shifts of modern business management is that individual businesses no longer compete as solely autonomous entities, but rather as supply chains. Business management has entered the era of internetwork competition. Instead of brand versus brand or store versus store, it is now suppliers—brand— store versus suppliers—brand—store, or supply chain Address correspondence to Dr. D. Lambert, Department of Marketing Logistics, The Ohio State University, 506 Fisher Hall, 2100 Neil Avenue, Columbus, OH 43210-1399. E-mail: lambert.119@osu.edu versus supply chain. In this emerging competitive environment, the ultimate success of the single business will depend on management’s ability to integrate the company’s intricate network of business relationships [1–3]. Increasingly, the management of multiple relationships across the supply chain is being...
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...Harvard Business School 9-488-016 Rev. March, 23 1992 Associate Professor Jeffrey Sonnenfeld and Research Assistant Meredith Lazo wrote this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 1987 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or write Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 United Parcel Service (A) The management committee at United Parcel Service (UPS) wrestled with the last item on the agenda. Frank Erbrick, head of the Information Services department, had been invited to make a presentation. Responding to Erbrick’s presentation, Jack Rogers, chief executive, inquired: “So you’re convinced that we can’t locate this talent internally or develop it in the smart computer-trained kids working in our districts?” “Oh, I think we can groom some from the inside, but we also have to get a large number of the senior programmers and middle managers from the outside. The field has gotten very specialized,” replied Frank. Erbrick was interrupted by Operations Vice President Frank Middendorf: “Look Frank...
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...Powered by TCPDF (www.tcpdf.org) OLIN BUSINESS SCHOOL Summer 2015 Advanced Corporate Finance IIIFrontiers of Valuation B62 FIN 534C Professor Todd Milbourn B62 MGT 534C Advanced Corporate Finance III – Frontiers of Valuation Summer 2015 Professor Todd Milbourn The Olin Business School Table of Contents 1. Valmont Industries HBP Case # UVA-F-1191 ............................................................................... 1 2. Super Project HBP Case # 9-112-034 ........................................................................................... 21 3. Calaveras Vineyards HBP Case # UVA-F-1094 ........................................................................... 37 4. Paginas Amarelas HBP Case # UVA-F-1210 ............................................................................... 63 5. Using Crystal Ball HBP Case # UVA-QA-0561 .......................................................................... 89 6. Valuation in Emerging Markets HBP Case # UVA-F-1455 ......................................................... 95 7. Project Valuation in Emerging Markets HBP Case # 9-702-077 ............................................... 113 8. Valuing Companies in Corporate Restructurings HBP Case # 9-201-073 ................................. 131 UVA-F-1191 Rev. Feb. 1, 2011 VALMONT INDUSTRI V IES, INC. Forty years ago, we made our fi F m irst center p pivot irriga ation system It was m. es ssentially a long steel pipe...
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