By putting dofasco in a trust arcelor sought to

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By putting Dofasco in a trust, Arcelor sought to deprive Mittal of a way of defraying the cost of the takeover by preventing Mittal from selling the asset without the permission of the trustees who were all Arecelor appointees. Arcelor also sought to put a large portion of its stock into “friendly hands” by seeking a white knight. To stretch out the process and raise the cost of a takeover to Mittal, Arcelor refused to engage in direct negotiations with Mittal until they delivered a detailed business plan as to what they proposed to do with the combined firms. Arcelor proceeded to ignore the plan when it was submitted.
3. Using the information in this case study, discuss the arguments for and against encouraging hostile corporate takeovers
4. Was Arcelor’s board and management acting to protect their own positions (i.e., the management entrenchment hypothesis) or in the best interests of the shareholders (i.e., the shareholder interests hypothesis)? Explain your answer. Answer: While it seems on the surface that Arcelor’s management was acting to entrench themselves, the end result was an eye-popping 93% premium paid by Mittal over Arcelor’s share price when the takeover began. Consequently, it is difficult to argue that the end result was not in the best interests of Arcelor’s shareholders. Verizon Acquires MCI—The Anatomy of Alternative Bidding Strategies While many parties were interested in acquiring MCI, the major players included Verizon and Qwest. U.S.-based Qwest is an integrated communications company that provides data, multimedia, and Internet-based communication services on a national and global basis. The acquisition would ease the firm's huge debt burden of $17.3 billion because the debt would be supported by the combined company with a much larger revenue base and give it access to new business customers and opportunities to cut costs. Verizon Communications, created through the merger of Bell Atlantic and GTE in 2000, is the largest telecommunications provider in the United States. The company provides local exchange, long distance, Internet, and other services to residential, business, and government customers. In addition, the company provides wireless services to over 42 million customers in the United States through its 55 percent–owned joint venture with Vodafone Group PLC. Verizon stated that the merger would enable it to more efficiently provide a broader range of services, give the firm access to MCI's

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