week 5 - Weekly learning outcomes You should be able to...

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Fins 3625 Applied Corporate Finance Mergers and Acquisition Ud t d th b i ti ti ff l ti d Understand the basic motivations, payoffs, regulation and procedures in corporate mergers and acquisitions. BD Chapter 26 1 Fins 3625 Mergers and Acquisitions Weekly learning outcomes You should be able to Discuss common motivations of takeovers. Provide examples of recent transactions and trends in takeover activities in Australia. Describe different types of takeovers Describe different types of takeovers. Discuss the regulatory structure of takeovers in Australia Identify differences from that of the U.S. Discuss alternative growth strategies to takeovers. 2 Fins 3625 Mergers and Acquisitions Apply the APV method to value a target firm. Contrast the APV method with the corporate valuation model using WACC. Identify the role of investment bankers in takeovers. Discuss the usage cost and benefits in using a Discuss the usage, cost and benefits in using a holding company structure in takeovers. Define and discuss the rationale for divestiture. 3 Fins 3625 Mergers and Acquisitions Example: ANZ’s offer to takeover Etrade On Fri March 2 17:56:38, 2007 ANZ made an ASX company announcement that it is offering to buy all shares of Etrade. The announcement includes Bidder’s statement which sets out the terms of offer which sets out the terms of offer. ANZ sent the bidder’s statement to all shareholders of Etrade on March 14. The offer is dated accordingly. Fins 3625 Mergers and Acquisitions 4 Fins 3625 Mergers and Acquisitions 5 Top 10 Takeovers in Australia Target Name Bidder Company Gics Industry Date Announced Deal Value A$ Bil Bid Status Rio Tinto Ltd BHP Billiton Ltd (BHP) Metals & Mining 6/02/2008 $165 Withdrawn Westfield Holdings Ltd Westfield Group (WDC) Real Estate 23/04/2004 $25 Successful Coles Group Ltd Wesfarmers Retail Holdings Pty Ltd (WES) Food & Staples Retailing 2/07/2007 $22 Successful Hanson Plc Lehigh UK Ltd Construction Material 15/05/2007 $19 Successfu Fins 3625 Mergers and Acquisitions 6 Materials Successful St George Bank Ltd Westpac Banking Corporation (WBC) Banks 13/05/2008 $19 Successful Coles Group Ltd Wesfarmers Ltd (WES) Food & Staples Retailing 4/04/2007 $18 Withdrawn Rinker Group Ltd Cemex S.A.B. de C.V. Construction Materials 30/10/2006 $17 Successful Origin Energy Ltd BG International (AUS) Investments 1 Pty Ltd Energy 24/06/2008 $14 Unsuccessful Qantas Airways Ltd Airline Partners Australia Transportation 13/12/2006 $11 Unsuccessful General Property Trust Lend Lease Corporation Ltd (LLC) Real Estate Investmt Trusts 25/05/2004 $11 Unsuccessful
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Value of Recent Australian Takeovers 100 120 140 160 180 Fins 3625 Mergers and Acquisitions 7 0 20 40 60 80 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Successful Unsuccessful Withdrawn Five largest U.S. completed mergers (as of January, 2006) BUYER TARGET VALUE (Billion) Vodafone AirTouch Mannesman $161 Pfizer Warner-Lambert 116 America Online Time Warner 106 Exxon Mobil 81 Glaxo Wellcome SmithKline Beecham 74 8 Fins 3625 Mergers and Acquisitions What are some valid economic justifications for mergers?
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This note was uploaded on 10/03/2010 for the course FINS 3625 taught by Professor Kingsleyfong during the Three '08 term at University of New South Wales.

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week 5 - Weekly learning outcomes You should be able to...

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