Vodafone-Mannesmann Case Questions
Prepare a entered solution of no more than 6 pages Use the questions beneath as a tips for your solution. The solution must be a suggestion, not a mechanised list of answers On the initial page of your solution express: o what they are called and scholar numbers of your group associates in alphabetical order u the name of the training course (Advanced Corporate Finance) and the case (Vodafone) Deadline: Friday, April 6th, 2011, 18. 55 Area for delivery: E building, 4th ground, mailbox away from secretarys' offce (E four. 26).
Framework your dialogue around the subsequent questions, please remember not to simply answer all of them mechanically: 1 ) On November 19, 1999 Vodafone recommended that each Mannesmann share might receive 53. 7 Vodafone shares, to ensure that in get worse Mannesmann investors would individual 47. 2% of the equity of the newly combined firm. 1 a. On December 17, 99, based on the stock rates of the two firms, that seemed which the market predicted the probability of Vodafone successfully acquiring Mannesmann by around 60 per cent. Under the presumption that the two firms might trade in prices existing at August 21 if the bid failed, what is the market's approximate of the synergies of the offer? Based on this kind of estimate, should Vodafone shareholders support the offer? b. What is the present benefit of the anticipated synergies as shown in Exhibit twelve? (Assume that the synergies associated with revenues and costs expand at 4% annually past 2006, but savings via capital expenditures would not prolong beyond 2006, and that the merger will not affect the firm's standard of working capital. ) Use the normal exchange rate of EUR/GBP=1. 5789, as well as the Goldman Sachs WACC approximate (notice that total functioning profit effect is pre-tax). Based on these kinds of calculations, ought to Vodafone shareholders support the offer? c. UK equities went back 7. 7% over the UK risk-free price for the period 191993. This kind of suggests that Goldman Sachs' WACC estimate may be too low. Supposing a market...