Eagle Corp. has made a proposal in form of a tender offer for a further 15% shares of Blue Jay Energy. The cost is well below what some feel is the real worth of the aforementioned shares. This study focuses on finding strategies that may help us in finding strategies in order to close a potential worth gap in the circumstance of a hostile takeover bid.
The main choices are to rely on a poison pill, spin-off and a leveraged recapitalization. The case is perfect to illustrate the utilization of the financial markets (artificial white knight) to negotiate a deal.
Learning Objective: The goals of this instance are to: present reasons for and measurement of potential worth gaps; formulate a strategy to realize the value to close the gap; comprehend restructuring strategies and ethics of a strategy.
Publication Date: 01/01/1990
This is just an excerpt. This case is about Finance
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