Ultra is one of a small group of Brazilian companies compete petrochemical, each of which buys raw materials and is a minority owner Copene, "breaking" a company that provides ethylene and other materials. Because of industrial restructuring, the auction of shares held, which would provide a test position in Copene, if Ultra has been successful in its bid. Students have to decide what to Ultra qualify for this test position. Housing provides cash flow and cost of capital information to estimate the present value of the company. Estimating the number of bankruptcy is complicated by several factors. First, one of the competing owners likely bidder in the auction. Thus, if Copene not won, it would end up with illiquid minority position into a key supplier, who belonged to a competitor. In addition, the assessment should take into account the uncertainty of the Brazilian economic environment. Finally, the Chief Executive Officer and other senior executives have a stake in Ultra, so that they have significant incentive not to overpay and destroy shareholder value. "Hide
by Dwight B. Crane, Ricardo de-Reisen Pinho Source: Harvard Business School 29 pages. Publication date: 07 May 2004. Prod. #: 204146-PDF-ENG
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