Investment Banking Lecture 4

Investment Banking Lecture 4 - FPN1: INVESTMENTBANKING...

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FPN 1: INVESTMENT BANKING Lecture 4 – April 20 th 1
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The Book If you’ve bought it, email us the receipt to our gmail account: ucsdfpn@gmail.com 2
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Authors Joshua Rosenbaum Joshua Pearl West Coast Tour Conference Call Email questions to ucsdfpn@gmail.com Put “Question for Authors” in the subject line Follow with your question(s) in the message 3
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Office Hours Lakshya Wednesdays: 12.30pm to 2.30pm Rady 3S119 Kamron Thursdays: 1.30pm to 3pm SEQ 139 Ross Mondays: 6.30pm to 8pm SEQ 139 4
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Mentorship Program Deadline Extended: April 27 th , 2011 (one week from today) 5
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Chapter 2 Precedent Transactions Analysis a.k.a. “Transaction Comps” 6
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What is Investment Banking? Investment Banks help companies, organizations, and corporations RAISE MONEY for IPO: Initial Public Offering Mergers Acquisitions LBO: Leveraged Buy-Outs 7
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Mergers Not that common Usually between two “equals” Depends on deal dynamics Example: Exxon-Mobil 8
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Acquisitions 9
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Legendary Deals AOL buys TIME WARNER (2000) Deal Worth: $164 Billion ; Lead Bank: Salomon Smith Barney EXXON-MOBIL merger (1999) Deal Worth: $73.4 Billion PFIZER buys WYETH (2009) Deal Worth: $68 Billion ; Lead Banks: JPM, GS; MS, Evercore (2007) Deal Worth: $86.2 Billion, Lead banks: Lehman, Evercore ; Goldman Sachs COMCAST buys NBC UNIVERSAL from GE (2011) Deal Worth: $37.5 Billion ; Lead Bank: UBS DISNEY acquires PIXAR from APPLE (2006) Deal Worth: $7.4 Billion 10
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Offer Price: $39 Billion $25 Billion CASH, $14 Billion STOCK Approx. $145 Million in Advisor Fees (0.38% of deal value) Advisors for AT&T: Greenhill & Co (Lead) JPMorgan Chase Evercore Partners Advisors for T-Mobile: Morgan Stanley (Lead) Credit Suisse Deutsche Bank 11
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