The case is set in February 2006, right after Sonaecom's announcement of its own takeover bid for Portugal Telecom (PT) of EUR9.50 per share. The reader doesn't yet understand whether its management will accept the offer or not and how PT will react. The case recounts this intense and fascinating M&A transaction, taking us through one of the biggest takeover bids ever in the European Telecom sector, with a deal value above EUR15 billion. How will PTs board see this bid?
On the other hand, it is a dreadful blow to the international aspirations of the PT group. Furthermore, the sometimes contradictory views of workers, the competition regulator, the public and also the government have the potential to complicate matters further. This deal also has significant international consequences. One thing is certain. Given all the external pressure, for example from regulators, nothing will be the Sonae Group following this offer or the same for PT. The case serves as a stringent application of valuation methodology with a focus on understanding the problems in predicting future cash flows and also the susceptibility of the valuation analysis to underlying assumptions.
SONAECOM TAKEOVER OF PORTUGAL TELECOM (A) a case study solution
PUBLICATION DATE: January 01, 2012 PRODUCT #: IMD652-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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