...THE WM. WRIGLEY JR. COMPANY Team 14 Rado Oper November 19th, 2009 Contents Objectives 1 Management Summary 2 Active Investor Strategy 2 Effects of $3 Billion in New Debt for Dividend or Stock Repurchase 2 a. Outstanding Shares 2 b. Book Value of Equity 2 c. Price per Share 3 d. Earnings per Share 3 e. Debt Interest Coverage Rations and Financial Flexibility 3 f. Outstanding Shares 3 Wrigley’s Current Weighted Average Cost of Capital (WACC) 3 Debt Proceeds to Pay a Dividend or Repurchase Shares 4 Wrigley’s Recapitalization 4 Should Wrigley’s directors undertake the recapitalization? 5 Appendices 6 ⦁ Objectives This report seeks to answer the following five questions about William Wrigley Jr.: ⦁ In the abstract, what is Blanka Dobrynin hoping to accomplish through her active-investor strategy? ⦁ What will be the effects of issuing $3 billion of new debt and using the proceeds either to pay a dividend or to repurchase shares on: ⦁ Wrigley’s outstanding shares? ⦁ Wrigley’s book value of equity? ⦁ The price per share of Wrigley stock? ⦁ Earnings per share? ⦁ Debt interest coverage ratios and financial flexibility? ⦁ Voting control by the Wrigley family? ⦁ What is Wrigley’s current (pre-re-capitalization) weighted-average cost of capital (WACC)? ⦁ What would you expect to happen to Wrigley’s WACC if it issued $3 billion in debt and used the proceeds to pay a dividend or to repurchase shares? ⦁ Should Blanka Dobrynin try to...
Words: 1554 - Pages: 7
...USG Corporation was well known for it’s gypsum production, but also was very diverse in the amount of products they produced. Alongside with gypsum, they also were leaders in the respective industries of interior systems, wood fiber, and bathtub and shower enclosures. This exemplified USG’s core competency of product diversification. Their divisions were industry leaders in innovation, integration and low-cost advantage. Another one of USG’s core competencies was vertical integration within the company. Their stance on corporation structure would be a huge factor on how the company dealt with takeover offers in the future. One of the earlier corporate restructuring programs took place in 1985 in order to allow vertical integration to flourish more in the company. It was beneficial in that it led to record profits for the company. Because of the high demand for USG stock and the large amount of public attention, USG received several takeover offers. The one that is the focus of this summary is the Desert Partners offer. In 1987, Desert Partners began approaching USG in relation to purchasing outstanding shares. Desert Partners officially tendered an offer of $42.00 per share for 21.5 million shares. Sometime later they announced a proxy contest in which they would propose six new directors who could potentially replace the existing ones on the board. USG stood firm in its decisions to not sell their company and did not entertain any offers, either official or unofficial,...
Words: 440 - Pages: 2
...Company profile Wrigley เป็นบริษัทผู้ผลิตและจัดจำหน่ายหมากฝรั่งที่ใหญ่ที่สุดในโลก โดยที่อุตสาหกรรมอาหารและลูกกวาดนั้นมีการแข่งขันสูง และมักจะถูกปกครองโดยบริษัทใหญ่ๆ ทางบริษัทมีมูลค่าตลาดของหุ้นสามัญมูลค่าประมาณ 13.1 พันล้านดอลล่าร์สหรัฐ ประมาณการผลกระทบจากการปรับโครงสร้างหนี้ การปรับโครงสร้างหนี้ บริษัท Wrigley จะกู้ยืมหนี้สิน 3 พันล้านดอลล่าร์สหรัฐเพื่อใช้ในการจ่ายเงินปันผล หรือเพื่อใช้ในการซื้อคืนหุ้น Susan Chandler รู้ดีว่าสิ่งที่เกิดขึ้นนี้จะมีผลกระทบต่อราคาหุ้น ต้นทุนของเงินทุน การชำระหนี้สิน กำไรต่อหุ้น และการควบคุมการออกเสียง เธอจึงทำการประเมินผลกระทบในสิ่งเหล่านี้ ด้วยการใช้ข้อมูลทางการเงินของบริษัท Wrigley และบริษัทอื่นๆในอุตสาหกรรมเดียวกัน ผลกระทบต่อมูลค่าหุ้น Susan Chandler รู้ว่าการปรับโครงสร้างหนี้ของบริษัทสามารถคำนวณได้จากสมการค่าเงินตามเวลา และพบว่าหนี้สินจะเพิ่มมูลค่าของบริษัทเนื่องจากการจ่ายดอกเบี้ยจ่าย จะทำให้บริษัทจ่ายภาษีน้อยลง ซึ่งปริมาณเงินภาษีที่ลดลงคิดกลับมาเป็นมูลค่าปัจจุบันแล้ว จะเพิ่มมูลค่าให้กับบริษัทที่ไม่ได้กู้ยืมหนี้สิน โดย Susan Chandler คำนวณภาษีจากผลรวมของภาษีท้องถิ่น มลรัฐ และประเทศ รวมแล้ว 40% ผลกระทบต่อระดับของหนี้ หลังจากการกู้ยืมหนี้สิน 3 พันล้านดอลล่าร์สหรัฐ บริษัทจะสามารถจ่ายรายจ่ายที่จะตามมาจากการกู้ยืมได้หรือไม่ Blanka Dobrynin แนะนำให้ Susan Chandler สมมติว่าบริษัทออกตราสารหนี้เรทติ้ง BB และ B และจากข้อมูลอัตราส่วนทางการเงินที่สืบค้นมาได้ (ภาพ 6) Blanka Dobrynin คาดว่าต้นทุนของตราสารหนี้อยู่ที่13% และ Susan Chandler จะต้องตรวจสอบสมมติฐานของข้อมูลในตลาดทุน (ภาพ 7) ผลกระทบต่อต้นทุนของเงินทุน Susan Chandler รู้ว่ามูลค่าของบริษัทจะเพิ่มขึ้นสูงสุดเมื่อ...
Words: 298 - Pages: 2
...chose Wrigley Field for this activity for many reasons. A few being I live right by wrigley and I spend a lot of time around it and for another I attended opening day 2013! I have always loved Wrigley Field since I was a child but until this class first lecture, I realized how much more there is to everything, especially Wrigley Field. I believe that since 1914 Wrigley Field in context is a geographical known place to eat, drink, be entertained and watch baseball. Wrigley Field as a baseball stadium is a context in which the use of it is influencing and being influenced by the activities going on around it. Wrigley field opening day, thousands of people walking in with their cubs attire on, already long lines for beer and hot dogs. These actions are non material and material traces that have been around since the beginning of Wrigley Field. Sitting in my seat I was looking at the Ivy wall which again not only an material trace of the past but also is a non material trace. It brings back memories of when it came to the cubs in 1916 ever since then helping to create non material memories for players playing there and for the fans. Opening day it created a memory when numerous times our left outfielders did not catch the ball and but it hit the ivy wall. Wrigley on opening day was great to be at that day because they were playing old cub announcements from the old days on the speakers. It made me really feel like there was a lot of history that happened in that field. Wrigley field...
Words: 735 - Pages: 3
...Writing Effective Leads [pic] Five Ws and an H (or, finding a lead by emphasizing the most important news element): 1. WHO: President Clinton will visit Cuba next week at the request of Caricom nations. 2. WHAT: Lightning struck the upper deck at Wrigley Field last night while the Cubs were playing in San Francisco. 3. WHEN: Midnight tonight is the deadline for tax returns, but the local post office is ready to accommodate procrastinators. 4. WHERE: The Emerson and Towanda intersection is officially the most dangerous crossing in Bloomington, according to the Illinois Bureau of Transportation. 5. WHY: Because she could correctly spell "ostentatious," Lisa Wheeler will go to the state Spelling Bee finals. 6. HOW: By hitting his 50th home run last night for the fourth year, Chicago Cubs slugger Sammy Sosa etched his name in the baseball record books alongside Babe Ruth and Mark McGwire. Common Types of News and News-Feature Leads (more ways to "lead" the reader into the story) 1. Straight Summary Lead: Twenty-eight passengers and a crew of four were killed last night when a single-engine plane crashed four miles south of Bloomington. 2. Picture or Dramatic Lead: Mourners lined up for miles yesterday in the pouring rain to take one last look and lay flowers near the coffin of Mother Teresa, who lived among Calcutta's sick and needy for 35 years. 3. Background Lead: After two weeks of picketing, United Auto Workers put down their signs yesterday...
Words: 518 - Pages: 3
...The William Wrigley Jr. Company Group2 Ahsan Rashid Qazi 17110206 Sardar Noman Salim 17110210 M.Hasnain Shabbir 17110210 Jahanzaib Shoukat 17110286 Primary problems: This case is about The Wm.Wrigley Jr. Company, which has to incorporate debt into its capital structure and then decide between two alternatives of whether to Repurchase Share or to pay Dividend. In the wake of introduction of new products and foreign expansion, firm has to raise capital as suggested in the case of $3 billion debt, which will influence the Wm. Wrigley Jr. ‘s outstanding shares, shall it repurchase them or pay dividend to its shareholders. It also has to see the impact of this debt on the share price, the voting control of the Wrigley company, impact on EPS. Analysis: Impact on Share Price Before taking the debt the share price of the company was $56.37 with 232.44 million shares outstanding and a market value of 13.103 billion. After taking the debt of 3 billion, the market value increase by the amount of tax shield provided by debt i.e. $1.2 billion and the share price increases to $61.53. Impact on WACC The pre-capitalization WACC is 10.90% using beta= 0.75, Rf=5.65%, Risk Premium=7% The post capitalization WACC is 10.908% using Levered Beta = 0.87, Re= 11.74%, Rd=13% Impact on Voting Control Share repurchases results in less number of shares outstanding which increases the voting power of the Wrigley Family from 47% to 51%. Impact on EPS Before Recapitalization | Worst Case...
Words: 668 - Pages: 3
...Financial Planning The NHL Winter Classic is a hockey game played by two teams in the NHL. It is hosted either on, or close to New Years Day. The Classic has been around since 2008. Ever since the NHL started this annual game, it has been held outdoors. In past years, the event has been held at famous venues, such as Fenway Park, Wrigley Field, and Citizens Bank Park. The Winter Classic is a very unique event, because the NHL actually builds a temporary ice rink on the respective fields each year. It is an incredible undertaking financially, so the NHL has be extremely good at financial planning to take on an event of this size and nature. Because the Winter Classic is an annual event, and has been going on for a few years, the NHL already has a relatively good idea of the kind of financial responsibility it takes to implement this event. It could be argued that they should begin to plan this event at least a year in advance. For the first half of the 2012-13 season, the NHL players association was in a lockout, so no games were played. The staff tasked with planning the 2013 Winter Classic had a pretty good idea that the event would not be held, but they still had to plan as if it was happening. This shows that it is important to start planning as early as possible, in case of any bumps in the road. When planning an event, possibly the most important thing to plan on is the financial aspect. Usually, the financial report after the event is the best way to...
Words: 540 - Pages: 3
...1. Complete a minimum 800 word paper analyzing today’s segmentation strategy for the Colgate-Palmolive toothbrush and toothpaste market. 2. Use the Precision toothbrush case study as both an example of a target market analysis and a good starting point for your Colgate-Palmolive toothbrush and toothpaste market evaluation. 3. The analysis should include: a. Evaluation of current geographic, psychographic, demographic and behavioral segmentation variables. b. Evaluation of current cultural, social and personal factors of the consumer market. c. Recommendations for market segmentation strategies. i. Does one segment look more promising than others? ii. Should one segment be dropped? iii. What factors support your recommendation? 4. Submit as a Word document via the WS2 CP Paper - Submit Assignments link. Title your document WS2 CP Paper. For more information on how to submit assignments see Workshop One. 5. For grading criteria, refer to the Paper Writing Rubric below. Market Segmentation a) Consumer markets are formed into segments based on descriptive characteristics: geographic, demographic, psychographic and behavioral. Geographic segmentation divides the market into nations, states, regions, counties, cities or neighborhoods. Demographic segmentation divides the market based on variable such as age, gender, income, generation, social class and life-stage. Psychographic segmentation is using psychology and demographics to understand the consumer...
Words: 459 - Pages: 2
...9902224, 9081683, 9678513, 9253262 Financial Analysis Spring 2014 William Wrigley Jr. Company: Efficiently Financed or Financially Conservative? Introduction Blanka Dobrynin, a managing partner of Aurora Borealis LLC, is considering a potential investment in William Wrigley Jr. Company. Aurora Borealis LLC typically focuses on distressed companies that are in need of restructuring. Ms. Dobrynin believes that if Wrigley were to take on debt, it could create significant new value for the company. Ms. Dobrynin and her associate, Ms. Susan Chandler, have concluded that Wrigley could take on $3 billion in debt, assuming a credit rating between BB and B, at a yield of 13%; Ms. Chandler remains undecided on whether or not to suggest this $3 billion be used to pay an equivalent dividend or to repurchase an equivalent value of shares. Although leveraging a firm can create value, a detailed analysis is necessary to determine if doing so is the right path for Wrigley. The following analysis will evaluate the assumptions made by Ms. Dobrynin and her associate, examine Wrigley’s financial position under each alternative option, and provide suggested recommendations for Ms. Chandler to present to Wrigley’s board of directors. Key Issues Debt Rating: Ms. Chandler’s estimations regarding Wrigley’s credit rating may not be entirely accurate; therefore, the debt rating in which Wrigley should be categorized may not be BB/B. Each of the factors in Standard &...
Words: 1268 - Pages: 6
...WM Wrigley Jr. Company Group #2 Statement of the Problem: The William Wrigley Jr. Company was the world’s largest manufacture and distributor of chewing gum. They are an industry standard for international candy manufacturing and are competitive key players in the global market. William Wrigley Jr. originally founded the William Wrigley Jr. Company in Delaware as a partnership in 1891; it then became a corporation in 1903 based out of Illinois. The Wrigley’s company has been family ran up until recently when William D. Perez became president, CEO, and director. As of today, William Wrigley Jr. Co. corporate headquarters is located in Chicago, Illinois. Wrigley’s original two brands were Juicy Fruit and Wrigley’s Spearmint. These two brands are now a subsidy of the Mars Incorporated. Wrigley has since expanded, and it now owns a bunch of other brands, including Doublemint, Big Red, Winterfresh, Extra, Freedent, Hubba Bubba, Orbit, and Excel. Along with chewing gum, Wrigley’s offers mints, breath strips, and candies. Altoids, Crème Savers, Life Savers, and Velamints are some brands under Wrigley’s that offer these products. The company has done a good job of diversifying the amount of products that they manufacture. The Wm. Wrigley Jr. Company is a publically traded company in the New York Stock Exchange under the symbol, WWY As of 2006, Wrigley’s distributes to over 180 countries and has 15,800 employees worldwide (company website). The company manufactures...
Words: 1316 - Pages: 6
...CIO of this company, it is my job to look for opportunities to grow this company. An opportunity had come our way to be the sole supplier of micro beer in Wrigley Field, home of the Chicago Cubs, as well as get into 7 out of the top ten bars surrounding the ball park. It’s a great opportunity for a young company that would see tremendous growth from this expansion alone. The challenge is that the growth pattern goes against the current growth strategy put in place. The key is cost, and one of the biggest cost is advertisement which brings us to the use of Social Media. “ Through the use of Social Media, customers and prospects now have an almost instantaneous platform for discussion of their ideas, experiences, and knowledge.” Jeff Bullas This will be the key for me to try and change the mind of the Board. Word of mouth is one of the most inexpensive forms of advertising there is, and Social Media platforms allow us to get that rolling with very little cost. The rest of this proposal will consist of the plan that will show us how to accomplish plan the most economical, thorough way. Page 2. The How How will we accomplish such a feet. Well, it starts with presence. We can’t be make a name for ourselves unless we are smack dab in the middle of it. Setting up a regional office in Wrigley will be key, and allows us to keep a finger on the pulse of everything that is going on with our beer. As you can see there are many opportunities surrounding...
Words: 997 - Pages: 4
...Wm. Wrigley Company Case Analysis Adrienne Johnson, Ramona Rhodes, Makpal Shotbassova Webster University FINC 5880: Corporate Finance FALL I TERM September 10, 2014 Author Note Certificate of Authorship: This paper was prepared by me for this specific course and is not a result of plagiarism or self-plagiarism. I have cited all sources from which I used data, ideas, or words either quoted or paraphrased. Introduction Blanka Dobryn is a managing partner of Aurora Borealis LLC. This hedge funds goal is to acquire a large stake in the Wrigley Jr Corporation. Once this happens then Aurora borealis LLC will encourage WM Wrigley Jr to reorganize the capital structure. The Wrigley Company at this point does not have any debt. Dobryn, is thinking that they can make this company more valuable if they raise their debt and use that money to either pay dividends or repurchase their stocks. (Brunner, 2010) Our job today is to find out the best way to go about restructuring the company using different financial strategies that will put the company at minimal risk. Effects of using debt to recapitalized In researching options, there are a few things that should be considered. Assuming that everything will be positive, there are great benefits to restructuring. The EPS would increase because there would be less shares outstanding after the buyback. The market would look favorable upon that, thus increasing the share price. If Wrigley is able to borrow at a lower rate...
Words: 1318 - Pages: 6
...Hawaiian hula dancer who is front and center on the page with only a small portion of beach and ocean behind her. All seems well so far, right? Well, everything would be fine or at least acceptable if things were not so bizarre. The thing that struck me as a little out of the ordinary was that she was not wearing a real bikini top or even a coconut brassiere. The thing that makes this ad so degrading towards women is the fact that this beautiful young lady is wearing two packs of Orbit gum tied to string to cover up her breasts. That is not all. On top of the insult that they would exploit a woman’s breasts to sell chewing gum, they make a poor attempt at witty-humor as well. This is because the flavor of the chewing gum that Orbit and the Wm Wrigley Jr. Company are advertising is “NEW! Orbit Maui Melon Mint”. This is particularly...
Words: 622 - Pages: 3
... Homework [pic] Budanova Anastasia «Wrigley`s» Is one of the worldwide companies consisting of Juicy Fruit, Wrigley's Spearmint and Altoids. Other well-loved brands include Orbit, Extra, Starburst, Doublemint, Skittles, Freedent, Airwaves, Life Savers, Eclipse, and Winterfresh. Wrigley sells its products in more than 180 countries around the world. Small Introduction «History of Gum»: People worldwide have chewed on natural materials for hundreds of years. Some of these materials include thickened resin and latex from certain types of trees, various sweet grasses, leaves, grains and waxes. Today, gum base is made of man-made latex and divided into two major categories, chewing and bubble gum, with the latter having more elasticity. In recent years, nonstick gum bases for chewing and bubble gums have been formulated to satisfy the chewing needs of more consumers. Main points: - Structure and Organization of the company - Management Style - Mission - Vision & Goals - Image in the outside world - Ethics Structure&Organization: [pic] So, in conclusion I can say that Wrigley`s Company has got a Functional Structure. Management Styles: - Method when employees are able to take part in making decisions. - Method of reaching purposes Mission: The Wrigley`s Company mission statement is to have «Wrigley brands woven into the fabric of everyday life around the world.» ...
Words: 437 - Pages: 2
...Ethel’s Chocolate Lounges 1 Ethel’s Chocolate Lounges Jose Echavarria Strayer University Professor Phil Campos Marketing 100 Ethel’s Chocolate Lounges 2 Ethel is owned by Mars Incorporated and was named after his mother. Mars opened Ethel’s chocolate lounges in the Lincoln Park neighborhood of Chicago in April of 2005. Mars organization may prove to be a very excellent marketing strategy to boost the sales of chocolate. The Lounge will cater to the female and male consumer. The male gender will be in search of sweet treats for their wives and girlfriends for special events. Male gender will visit the shop to make a purchase for somebody special. Describe the type of consumer buying decision that best describes the choice to indulge at Ethel’s . The Mars brand is very popular and has produced familiar products for alot of years. M&M’s is a Mars chocolate that is well known and well liked by many around the world. . However, it's the extensive decision that will support the chocolate lounge. Interested constomers will take there time to research the new product in order to make an informed decision. Ethel’s Chocolate Lounges 3 Discuss the factors that influence a consumer to spend money and time at Ethel’s. There are several factors that would influence a consumer to spend money and time at Ethel’s Chocolate Lounge; they include environment, type of product, and exclusivity. The first factor is the attractiveness of the lounge with the over-stuffed...
Words: 865 - Pages: 4
