On the next slide you will see some questions relating to the case
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We will discuss these questions in class
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You don’t need to hand anything in, but do reflect on the
questions after you have read the case
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You are welcome to be as active as you want when we meet next
time to discuss the case and these questions!
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Case Study 4
1.
What were the possible synergies and forces propelling the merger between P&G
and Gillette—as well as the history of other takeover attempts for Gillette?
2.
In light of Gillette’s large increase in value during James Kilts’s tenure, was his
compensation reasonable? Was his pay package in the best interest of
shareholders?
3.
Evaluate the P&G offer. Make a list of the positive and negative aspects of
receiving shares or cash from both the perspective of P&G and Gillette
shareholders.
4.
Compare the valuation analyses in Case Exhibits 6 and 7. Why are they different?
Support and defend the validity of using each valuation method.
5.
Discuss the conflicts of interest for the investment bank in an M&A transaction
where the same firm that writes the fairness opinion in support of the deal
stands to be paid a large fee if the transaction is completed.
6.
Should investment bankers and companies spend their time appeasing
politicians worried about the effects of possible mergers? Are politicians
representing the interests of the public when they question the merits of a deal?
Also evaluate the role played by federal and international regulators. Is there any
better solution to the complicated regulatory process?
7.
Evaluate the role played by Warren Buffett in the merger. Should the support of
one investor be a deciding factor in the completion of an M&A transaction?
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Questions?
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Office hours:
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Room 02-C2-09
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Wednesdays 14.30-16.00
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Book appointment through [email protected]
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