ࡱ> #` bjbj5G5G *W-W-+lllllll(H(H(H8`H\HZtItItItItIOJOJOJOZQZQZQZQZQZQZ$[h]uZlQOJOJQQuZlltItIZWXWXWXQltIltIOZWXQOZWXWXllWXtIhI ƨ(HTtWXZ4Z0ZWXn^Wn^WXn^lWXOJ6LWXND]O<OJOJOJuZuZWXOJOJOJZQQQQAFFllllll February 20, 2007 Sirius and Xm Agree to Merge, Despite Hurdles (A1) Big merger in new industry raises interesting issues concerning value of combining to firms, an example of an investment decision which is the focus of the first half of this semester Future of Chrysler Rests With Zetsche (A2) Provides insights into a divestment decision and the role of investment bankers Airbus Delays Overhaul Amid Four-Nation Dispute (A3) -- Corporate governance issues illustrated when governments, politics, and unions get involved in decisions affecting shareholders wealth Emails Reveal Backdating Scheme (A4) How executives covered tracks in not serving shareholders interests, another corporate-governance issue as we discussed in class February 21, 2007 Renault, Nissan Not Interested in Chrysler (A3) Valuation of acquisition falls short of costs for two major auto firms Warner Is Closer to EMI Deal (A4) Acquisition entailing valuations like we are performing in this class essential to developing strategy through mergers and are well illustrated in this story; see also Roundys Supermarkets and Mittal Mill stories on the same page Nike and Sealed Air Buck Trend of Fewer Stock Splits (B5D) We discuss cash versus stock splits later in the semester and the story illustrates their use Whats Aiding Buyout Boom: Toggle Notes (C1) Interesting story illustrates the flexibility of design in fixed-income securities (bonds) that we have discussed, that we will study, and that are part of the group project [Stories for the following dates will be added later.] February 23, 2007 Mutual Funds and the Buyout Boom (C1) Example of the benefits of the market for corporate control for mutual fund holders, benefiting smaller shareholders and savers A Landmark Vote in Japan: Shareholders Finally Say No (A1) Extension of U.S. types corporate governance to Japan has been slow; story contrasts corporate governance in different countries Herbalife Returns to Spotlight (A12) Large shareholder attempts to take public firm private and share price drops, another corporate governance and valuation story February 24-5, 2007 Buyout Firms Seek Utility TXU For $32 Billion (A1) Important acquisition story about possibly largest ever leveraged buyout illustrates importance of valuation techniques we study and apply this semester and the role of private-equity firms we discussed in class 2 February 26, 2007 Bidders Try to Pre-empt Gridlock in TXU Deal (A1) Non-economic and financial considerations (politics) discussed Station Casinos Accepts Revised $5.5 Billion Offer (A3) Story again illustrates the importance of estimates of market values used, not only of stock but also of the debt assumed in the transaction as we use in group project, in an acquisition and also demonstrates the growing role of private equity Shareholders Push for Vote on Executive Pay (B1) Growing debate on executive pay is having major impact on the corporate governance debate we have been discussion in class New Predator in Takeovers (C1) Good description of hostile takeovers (involving private equity), discussed in class 2 February 27, 2007 In TXU Deal, Texas Regulador Has Few Levers to Pull (A3) Role of regulation in major acquisition illustrates potential of government policy to influence values EADS Clears Airbus Restructuring Plan (A13) Story provides contrasts between U.S. and European corporate governance that we have been discussing early in the semester Peltz Uses 5.5% Tiffany Stake To Push for Broad Changes (A13) A good illustration of minority shareholder attempting to influence corporate strategy through the use of board politics Halliburton Moves to Cast Off Rest of KBR, Become Pure Play (A14) Story illustrates importance of sale price and valuation in divestiture, and also is good example of the words pure play we will use in discussing Chapter 12 TXU Buyout Proposals Mixed Effect (C8) Very good story on the effect of increased leverage in acquisition on bondholders investment values, a topic we discuss at the end of the semester February 28, 2007 March 1, 2007 As Market Fell, Some Big Names Won Their Bets (A1) Story illustrates the activities of hedge funds and their speculative strategies Markets Fall May Augur Waning Appetite for Risk (A2) Story discussed impact on value of securities of perceptions of risk, which we will relate to the discount rate on fixed-income securities in class 5 Ford Overhaul Will Cost $11.2 Billion (A6) Story illustrates impact of downsizing costs on accounting numbers and discussed the sources of those costs Manny Happy Returns by Jeremy Siegel and Jeremy Schwartz (A12) Op ed piece contains very good background discussion of S&P 500 index that we will discuss in Class 6 Best of Times Is Worse For Investment Bankers (C1) Very good story discusses daily challenges of investment bankers and describes the competitive world they operate in, where firms develop their own valuation expertise (that you are learning) and private-equity firms change the environment for deals March 2, 2007 GM Delays Filings, Stoking Doubts (A3) GM delays filing 10-K, illustrating how markets react to late disclosures on operations Opinion: The Compliance Board (A11) Director at Hewlett-Packard provides inside view of corporate governance issues we have discussed this semester Oracle Adds Business-Intelligence Firm Hyperion (B3) Another illustration of a corporate acquisition demonstrating the importance of valuation A Brazen Insider Scheme Revealed (C1) Insider trading is a focus of many discussions in advanced finance classes and this is a very good story present the issues with a current example of the problem Picky Pickers Advise Patience (C2) Story defines and illustrates value investing, something we discuss in class 5 ISS Backs H-P Proxy Push to Boost Big Holders Clout (C2) Story illustrates influence of Institutional Shareholder Services (ISS) in advising shareholders on how to vote their proxies and is a very good illustration of the importance of institutional investors in corporate governance, as discussed in the first week of classes March 3-4, 2007 Middle East Telecom Deal Hits $3.7 Billion (A3) Large international telecom deal illustrate foreign mergers and acquisitions (M&A) activity The Weekend Interview with Myron Scholes: Risk Manager by Holman Jenkins (A9) An interview with an important academic responsible for important financial theories we discuss later this semester and a current hedge-fund manager, providing insights into risk and hedge funds March 5, 2007 New Exotic Focus For Hedge Funds: Uranium Market (A1) Insights into types of trading strategies followed by hedge funds, a form of private equity discussed earlier in the semester Alltel Is Calling Potential Buyers (A3) Divestiture illustrates importance of valuation and the role of strategic acquisitions; see also Gordon Gaming to Sell Famed Sahara Casino (A11) New State Awaits J.P. Morgans Dimon (C1) Good story on how executives of corporations court shareholders in effort to gain approval for strategies, an illustration of the importance of corporate governance we have stressed Summit Snubs Takeover Bid From Paladin (C3) Example of role of valuation in fighting takeover attempts March 6, 2007 RIM Sets Restatement, Shake-Up On Board in Backdating Fallout (A3) The option backdating issue raises questions concerning corporate governance and accounting In France, Airbus Takes Center Stage (A12) Good story discussing problems with corporate governance when private investors dont control the board or strategy Toshiba Corp.: Plant to Boost Output Of Flash Memory Chips and SafeNet Inc.: Investors Agree to Buy Firm for $634 Million (both A13) Little examples of importance of capital investment valuations needed for corporate decisions At Citigroup, Crittenden Plans to Look for Levers (B4) Great story on challenges facing the chief financial officer in a new job in poorly performing firm, a potential hero for this course March 7, 2007 Making Connections: Verizons Network Bet Relies on Games, TV (A1) A good illustration of the real options discussed in a few weeks associated with a major capital investment, discussed in Chapters 7 and 8 materials Companies Say Backdating Used In Days after 9/11 (A1) Another story building on original Wall Street Journal breaking the use of backdating and raising the questions of fairness and corporate governance issues (see also Op Ed piece by Holman Jenkins, The Backdating Molehill, p. A16) -------------------------------------------------- March 8, 2007 French Twist: Attention, Shoppers: Europes Stores in Play (A1) Minority shareholder, private equity firms, and family owners all contest control of retail assets, including land, in contest over corporate strategy GM CEO Says Mergers Unlikely (C3) Corporate strategy and acquisitions in context of Chrysler sale and auto restructuring describe possible sources of value from acquisitions Take-Two Shareholders Are Plotting Board Battle (B4) Story illustrates a hostile proxy contest over control of firms plagued with option-backdating scandal Options Fines: A Hard Call (C1) Good article reviews costs and damage to shareholders of back-dating of options and provides illustration of SEC securities law enforcement March 9, 2007 Carrefour Studies Its Real-Estate Options With Goals of New Shareholders in Mind (A3) Sale of firms fixed assets become control issue of minority shareholders Standards Deviation by Arhtur Levitt, Jr. (former SEC chairman) (A15) Great review of accounting standards oversight and regulation, affecting the quality and reliability of disclosures analysts (like you) rely on Why ETFs Can Have Outsize Impact on Small Stocks (C1) Quantitative investors not driven by fundamental analysis have an impact of small-firms (like most of you are analyzing) trading and prices Extendibles Continue to Grow (C9) New types of fixed incomes illustrates creativity and flexibility in design of debt issues March 10-11, 2007 Applebees Tries to Move On As Talks With Breeden Fail (A2) Board battle illustrates shareholder politics in corporate financial management KKR, Boots Insider Plot $18.7 Billion Bid (A3) Discussion of private equity takeovers and value creation in story about another bid requiring valuation techniques you are applying in group project March 12, 2007 Ford Nears Sales of Aston Martin (A3) Major asset value important in sale by auto-maker to raise cash New York Times Hear Key Holders Complaints (A3) Dual share structure (like Nike has) causes institutional investor problems, board hears complaints as example of board politics and dual-share structure in corporations General Motors: Bylaws Amended to Allow For change in Board Seats (A9) Change in corporations bylaws affecting corporate governance discussed in good story March 13, 2007 Tech Companies Bleeding Red Ink Pursue IPO Goal (A1) Valuation of firms with losses (and no profits ever) characteristic of dot-com era, discussed The Insiders: How Five New Players Aid Movement to Limit CEO Pay (A1) Corporate governance issues on CEO pauy and role of institutional investors described Offers to Buy Chrysler Could Come by Months End (A2) Major restructuring raises many issues on how to realize maximum value from a firms assets and their sale KKR Spots Cash in Dollar Generals Till (A10) Good story of private-equity firm acquisition and where they see value in an acquisition United Healths Quest and Alliance Boots Rejects Offer (both A12) Good stories on acquisitions as part of corporate strategy, and role of private equity in restructuring Boston Scientific Unit IPO? (A14) Sale of 20% of unit creates new shareholders in multi-division firm, making division a pure play as discussed later this semester Take-Two, Investors Lock Horns (A19) Board battle illustrates fight for corporate control Buyout Shops: Sharks Serving Vital Function (C1) and KKR Hunts for a Bargain (C16) Stories describe operations of private equity firms in detail March 14, 2007 After Delay, GM to Post Results for All of 2006 (A2) Late filing example, relevant to the availability for use of audited financials in your group analysis Beijing Clears Intel Chip Plant, Marking a Potential Milestone (A4) Great descriptyion of a fixed investment (a chip-making plant or fab), illustrate corporate investment decision we discuss in Chapter 7 discussion Merck KGgA Draws Bidders For Generics (A9) Sale of unit illustrates necessity of valuation in a spin-off or divestiture of firms assets Peltz Shows a taste for Cadbury (A10) Minority investor urges conglomerate food company to restructure, illustrating corporate governance issues and finance of divestitures Power-Grid Firms Gain Backers ( B11B) Venture capitals role in new technology financing described, illustrating one type of private-equity firm Out of Space, retailers Trim Growth Plans (C4) Good story on corporate use of cash in either fixed investment or returning it to shareholders, a discussion we have later this semester A Summit on U.S. Rules: Too Gosh-Darn Complex (C4) good review of debate on U.S. capital-market regulation (e.g. Sarbanes-Oxley) with many important dignitaries quoted [See also: Full page advertisement to Caremark Shareholders about how to vote on CVS merger] March 15, 2007 H-P Leaks Case Fizzles in Court (A3) Anticlimactic end to widely covered corporate governance issues raised by spying on directors thought to be leaking information Unlike U.S. Rivals, Freeport Expands (A8) Good story on merger strategy and how valuations like you are doing for the class project are done and the role they play in strategy Carrefours Defense (A9) Background on corporate governance with family and institutional shareholders fighting for control and good description of the part investment banking firms play in these disputes March 16, 2007 Secret Signals: Ex-Telecom CEO Fields Black Box Trail Defense (A1) Good background story about government prosecution of inside trading, something we do not discuss this semester but often raised in advanced finance classes and a very controversial subject In Breakup, CEO of Cadbury Faces His Biggest Deal (A1) Shareholders force management to consider breakup of company to increase shareholder value, illustrating corporate governance and importance of valuations CVS Expected Is to Win Caremark (C3) Disappointed shareholders expected to tender shares in a hostile takeover, illustrating the importance of value creation to maintain power in corporations Carlyle Group Plays It Safe (C14) Discussion of investment strategy of one of the most well known private equity firms, background for understanding evolution and current state of this industry segment of asset-management March 17-18, 2007 Big Buyout Firm Prepares to Sell Stakes to Public (A1) and Why Blackstone IPO? (B4) Private-equity management firm (not to be confused with the pools created by rich limited partners themselves), Blackstone Group, considers goingt public, another development in the private-equity market we have discussed (note: management firms are typically general partners, not like institutional or wealthy investors, who are limited partners in the pools) Caremark Holders Approve CVS Bid (A6) good example of shareholder vote approving sale of their companys assets to management team hostile to the firms managers The Smart Way to Tell Firms How to Operate (B1) Discussed details of voting proxies abnd challenges this poses for institutional and retail shareholders --------------------------------------------------------- March 19, 2007 Blackstone Plan Could Reshape Private Equity (A1) Blackstones plan to go public is discussed in context of changes in the private-equity market we have discussed this semester Qantas Offer Gives Investors Pause (A8) Private-equity investment in airline raises questions about valuation of take-over offer, demonstrating changes in valuations we study Community Health Nears Triad Deal (A8) An operating firm competes with private-equity firms in acquisitions, illustrating differences in intrinsic values to different buyers, as discussed in class Daimler Unions Vow to Fight Bid (A9) Great example of problems for investors when workers represented on boards, an alternative corporate-governance model in European countries More Outside Directors Taking Lead in Crises (B1) Good story on distressed firms board politics and the role of outside directors in these situations, illustrating advantages of representation outside of management in crisis EGL Nears Buiyout Led By Its Chief (B6) Good example of a management buyout to avoid public ownership problems discussed as part of the story Borrowing Without Limits (C12) Story illustrates the importance of debt covenants in determining the costs of outside financing and their role in borrowers bargaining with lenders March 20, 2007 Driller Hercules Offshore to Buy Todco (C3) and Petrobas Leads Group in Purchase of Ipiranga (C7) Goods examples of corporate acquisitions with shares and cash as part of an industry restructuring (in oil services) March 21, 2007 Paper Chase: How a Money Manager Battled New York Times (A1) Great story follows step-by-step attack by an institutional investor against corporate governance structure and famous family-dominated newspaper firm, illustrating many aspects of problems of corporate goal being met for minority shareholders Icahn Gets His Way at Blockbuster As Chief Antioco Calls It Quites (A3) Another major investor ousts management due to questions about performance and compensation, another demonstration of the importance of corporate governance Why Be Public? by Holman W. Jenkins, Jr. and CEOs and Their Millions an editorial (A18) Editorial page discussion of issues related to executive pay and costs and benefits of private versus public ownership of corporations, hot topics we have discussed in class March 22, 2007 Shelf Life: As Its Brands Lag at Home, Unilever Makes a Risky Bet (A1) Good story illustrating role of establishing asset values for sale and projecting future revenues as part of a required strategic shift, tasks confronting you this semester Motorola, Facing Handset Woes, Predicts Loss; Shakes Up Suite (A4) Poor share performance forces strategy and management changes Borders Business Plan Gets a Rewrite (B1) Another strategic shift requiring careful analysis of new investments, like we study in Chapter 7 discussion Kraft Sets Path for Overseas Expansion (B4) CEO establishes plan for multiple acquisitions and extends search for investments down the organization structure, showing how corporate-wide acquisition standards must be established to discipline investment growth Hedge Funds Vote (Often) (C1) Interesting strategy by private-equity funds to influence shareholder votes illustrates a potential problem or issue in corporate governance on behalf of long-term investors Credit-Ratings Firms Get Caught Up in Subprime Meltdown (C2) Good insight into challenges facing debt rating firms, whose ratings you have relied on for Part 1 of project March 23, 2007 Blackstone Aims To Keep Control As Public Entity (A1) and At Blackstone, James Builds A Following (C1) Background pieces on how hedge fund contemplating initial public offering is structured and details of how the IPO will affect current owners and investors, important in following the widely-discussed developments in private equity in U.S. Motorolas Call For Help (A6) Great story illustrating how not building shareholder value causes problems for management as board power increases to change tactics Cadbury-Hershey Alliance May Be Tasty for Investors, but Challenges Persist (C12) Analysis of corporate efforts to restructure business strategy, and discussions highlights use of P-E ratios we discussed with Chapter 5 discussions March 24-25, 2007 Tribune Seems to Favor Zell Offer (A3) Restructuring in newspaper business led to auction of company, illustrating asset sales and central role of valuation in business strategy Carrefour Holders Get Backing for Board Seats (A3) Good story on corporate governance challenge evolving over this semester Convertibles Flood the Market (B5) Story discusses current trend to issue convertible debt, illustrating concepts covered in Chapter 20 and relevant to some groups debt valuations Valuing Blackstone Group (B14) Good illustration of use of P-E multiples in valuation, applied here to IPO value of major private-equity firm March 26, 2007 Gradual Ascent: Burned by Last Boom, Boeing Curbs its Pace (A1) -- Great story about familiar firm and relation between production, revenues, and costs, relevant concerns for valuation in analyses similar to the group project this semester Tribune Suitors Criticize Auction (A10) Example of corporation selling itself and how it can favor certain potential acquirers Beckman to Acquire Test Maker Biosite (A10) Acquisition requires analysis and valuation similar to group project Funding Deals On the Cheap Grows Harder (C1) Discussion of how private-equity takeovers are financed and depend on cheap debt characteristic of recent years March 27, 2007 Xtrata Agrees to Buy Lion Ore (A10) Corporate acquisition illustrates key role played by valuation in implementing corporate strategy Delta to Submit List of Directors (A11) Airline in bankruptcy submits list of board members to credit committee, illustrating problems to management in bankruptcy How Borrowing Yields Dividends At Many Firms (C1) Great article illustrating the dividend decision, a major topic at the end of the course. March 28, 2007 SEC Is to Get More Sway Over FASB (C1) Securities Exchange Commission (SEC) oversight of FASB accounting rules body, governing data we use in analysis, changed to increase SECs influence March 29, 2007 Cerberus Adds to Detroit Bets With tower Automotive Deal and The New Hound of Detroit (C18) Private-equity firm is buying auto parts maker for $1 billion, already owns 51% of GMAC (auto finance) and has offered to buy Delphi (auto electronics) and is contending for purchase of Chrsyler; article describes private equity role in auto industry restructuring Chinese Puzzle: Is Loan Valid, or Shell Game (C1) Story illustrates dangers of opaque corporate governance in foreign jurisdictions and how shareholders interests may be harmed March 30, 2007 Take-Two Holders Succeed in Board Coup (A3) Good example of institutional investors influence in board fights U.S. Steel Bulks Up With a Defensive Move (A8) American steelmakers join world-wide movement to consolidate in recent acquisition Herbalife Panel Advises Against Takeover Offer (A8) Boards rejects offer because it falls short of own valuation of firms asset value Clear Channel: No Passage (C14) Details on private equity deal preserving founders interests with privatization, describing stub equity March 31-April 1, 2007 Tribune Board to Consider Offers (A2) Major sale of firm reveals how board weighs potential offers The Price of Buying Chrysler A5) Another corporate sale and discussion of the complexities in selling a major division as part of a restructuring Iberia Gets $4.55 Billion Takeover Offer (A5) Airline restructuring in Europe, in part due to change in regulations, requires valuations of many entities in acquisitions Bond Investing Gets Friendlier (B1) Changes in the retail fixed-income market follows development of NASD Trace system you used for Part 1 of project The LBO Booms Real Fuel (B14) Conflicts of interest in management purchase of stakes in their firms with private-equity assistance --------------------------------------------------------- April 2, 2007 Starwood CEO Heyer to Leave (A3) Board ousts CEO without business reasons, mainly clash of personalities, an interesting wrinkle in corporate governance structured to maximize shareholders wealth KKR Is in Talks to Acquire First Data (A3) Another private-equity acquisitions, illustrating importance of valuation and financing we discuss later in the semester Tribune Appears to Be Nearing a Deal with Zell (A3) and Tribune Staff Would Bear Risk in Financing Buyout (A13) Restructuring of newspaper firm as a result of founder-family boardroom feud uses innovative financing, including employees pension funds that the second story explains (with historical precedents) in the clearest detail I have found Mergers Hit Record, With Few Stop Signs (C11) Current mergers and acquisition wave is described April 3, 2007 Final Edition: Zell Wins Tribute in Bid to Revive a Media Empire (A1) The apparent end of a story beginning with a shareholder complaint about value creation ends with purchase using complicated financing (see below cited stories) Tangled Network: Behind Telecom Italia Fight, Business and Politics Meet (A1) and Aeroflot to Make Bid for Alitalia (A3) Good comparisons of corporate governance issues in U.S. and Continental Europe (Italy) Daimler Rift May Complicate Plans (A11) European corporate governance with labor board representation makes sale of Chrysler unit more complex, illustrating differences in U.S. and Continental European rules Shareholders Say No in China (C3) Increasing power of shareholders in China where state owns large stakes in many public companies Buyouts Batter Debt Ratings (C6) Good illustration of role of rating agencies and leverage in bankruptcy risk, a topic we discover in the last weeks of class April 4, 2007 April 2, 2007 Starwood CEO Heyer to Leave (A3) Board ousts CEO without business reasons, mainly clash of personalities, an interesting wrinkle in corporate governance structured to maximize shareholders wealth KKR Is in Talks to Acquire First Data (A3) Another private-equity acquisitions, illustrating importance of valuation and financing we discuss later in the semester Tribune Appears to Be Nearing a Deal with Zell (A3) and Tribune Staff Would Bear Risk in Financing Buyout (A13) Restructuring of newspaper firm as a result of founder-family boardroom feud uses innovative financing, including employees pension funds that the second story explains (with historical precedents) in the clearest detail I have found Mergers Hit Record, With Few Stop Signs (C11) Current mergers and acquisition wave is described April 7-8, 2007 Starwood CEOs Ouster Followed Battle with Board Over His Conduct (A1) CEO is fired by board for personality and leadership reasons, not poor performance: they didnt like him Telecom Italia Chairman Quits After Biggest Holder Shows a Lack of Support (A6) Minority shareholder causes board chairman to resign, a corporate governance example from Italy nt like him Telecom Italia Chairman Quits After Biggest Holder Shows a Lack of Support (A6) Minority shareholder causes board chairman to resign, a corporate governance example from Italy ---------------------------------------------------- April 11, 2007 Electric Attraction: For Europes Utilities, A Frenzied Power Grab (A1) Great background story on German E.Ons attempt to snatch a Spanish electric utility from domestic gas companys acquisition attempt, describing the role of the Spanish government, the European Common market, private investors, and other competitors, resulting in a doubling of the original offer price, providing another example of the importance of valuation we apply in group project Daimler to See Bidders Minus Kerkorian (A3) Good insights into bidding process for a sale of a major business unit, requiring extensive valuation analysis, and politics in dealing with bidders Unibail to Buy Rodances In $14.96 Billion Deal (A10) Cross-border acquisition and friendly merger of equals in Europe Oppenheimers Revolt Shows Mutual Funds New Mood (C1) and Emerging-Market Investors Seek More Influence (C3) Institutions investors become more active in corporate governance as illustrated by actions in U.S. and abroad, containing a representative list of firms under pressures from shareholders activity currently +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ April 12, 2007 Nestle to Get Long-Sought Gerber (A3) Restructuring involves sale of assets and valuations of buyers and sellers differ (their intrinsic values differ), as discussed in class SK Seeks Split of Firm to Aid Transparency (A10) Korean firm decides to split into two divisions to increase accountability and transparency [ Sainsbury Deals Collapse Throws Focus on Rivals (A10) -- Private equity firm offers dont always work out, this story describes a breakdown in a deal A Second Wind for Nike (C14) Story on firm used as example in class, providing background into how analysts change their assumptions April 13, 2007 Krafts Hearty Dividends Buy It Time to Recharge (C1) Great example of the dividend/cash disbursement decision we discuss in two weeks April 14-15, 2007 Icahn Steps Up Efforts In Bid to Win Election to Motorola Board Seat (A6) Notorious corporate raider and activist wants board seat on underperforming firm Cash Flows May be Drying Up (B5) Aggregate free cash flow we emphasize in valuation may be falling in the U.S. April 16, 2007 Stage Managing the Annual Meeting (B1) Interesting background on role of annual meetings in corporate governance from managements point of view Investors May Get More Say In Selection of Directors (B3) Trying to open board elections to shareholders to avoid confrontations is described as emerging corporate-governance issue in the U.S. April 23, 2007 MedImmune Nears Big Payday (A3) Major pharmaceutical acquisition illustrates central role of valuation in restructuring of an industry and also illustrates use of multiples in discussion specific valuations UAW Group, Tracinda Discuss Bids for Chrysler (A14) Critical role played by unions in auto restructuring affects ability of private-equity firms to participate in bidding and raises unions bargaining power An Unrelated Story: U.S., Global Stock Markets Increasingly Take Separate Paths (C1) Excellent example of low correlation between asset classes being used to reduce portfolio risk April 24, 2007 Paired Up: Merger Challenge: Unite Toothbrush, Toothpaste (A1) Great story illustrates problems companies have in realizing cost and revenue synergies from a merger that appears to make sense AstraZeneca Hopes Purchase Breaks New-Product Slump (A8) Merger seen as strategic means to solve corporate strategy issues as part of industry restructuring Deltas Quarterly Loss Narrowed (A9) Good example of firm in bankruptcy, illustrating some of the principles we discuss next week Dr. Zs Chrysler Predicament: Selling Unions on Sacrifice (C1) Non-financial issues affecting sale of corporate unit and illustrating corporate governance problems raised by worker bargaining power April 25, 2007 Coca-Cola Is in Deal Talks With Glaceau (A3) Another acquisition story illustrating the critical significance of valuation theory in corporate strategy Amazon Finds Happy Balance Of Revenue, Spending Growth (A10) Analysis of determinants of corporate cash flow illustrating the kinds of analysis you performed in Part 2 of the group project Behind Stocks Run at Record (C1) Story analyzes as well as can be done why the Dow is at a new record IBM to Spend $15 Billion In Expanded Stock Buyback (C2) Good example of corporate use of cash as discussed in Chapter 18 April 26, 2007 Wendys Considers Possible Sale (A2) Another corporate restructuring placing valuation at the center of the analysis and simultaneously illustrating the importance of minority shareholders in corporate governance Alcoa to Shed Units, Boosting Takeover Buzz (A4) Restructuring by focusing on core businesses, selling units requiring valuation analysis Materials, Research Costs Catch Up With Honda (A12) Another example of how costs affect margins, as you discovered in Part 2 of the project Lucky 13000: Dow Hits Record (C1) Two stories provide a good review of stock-market performance as well an another attempt to explain its current record high and a relation of market to economy-wide performance (as assumed in the CAPM one-risk model) April 27, 2007 Dropped Call: How Motorola Fell A Giant Stop Behind (A1) Good story on how a companys share suffer from missteps in sales and product development Unusual Buyout Offers a Piece to Shareholders (A1) Innovation in private-equity acquisition describes stub equity and changing takeover tactics Microsoft Reaps Vistas Dividends (A3) Good story on relation between accounting numbers and product introductions, and how changes in accounting for revenue can be a problem for analysts (like you) Is Harman Buyout Sound? (C12) Good discussion of issues associated with above story about stub equity April 28-29, 2007 In Telecom Italia Struggle, Telefonica Aims to Own Share (A3) Complexities in acquisitions in European market Choosing Accounting Lets Firms Play Even More Games (B3) Accounting issues and their relevance to analysis of performance are discussed April 30, 2007 Outer Limits: As Funds Leverage Up, Fears of Reckoning Rise (A1) Excellent but technical demanding article on non-debt sources of leverage in the capital markets, with a good discussion of derivatives and how they work to increase leverage Yahoo Will buy the Rest of Right Media (A3) Yahoo increases its confrontation with Google by strategy of acquisitions, requiring valuations like we are doing Mazdas Remodeling Makes Progress (A11) Corporate restructuring to improve operating margins illustrates what new management or approach can do to increase earnings and value, possibly a goal of your team in group project Irrational Complacency by Burton Malkiel (A15) Great opinion piece on valuation of the stock market relying on the types of simple valuations we discussed in Chapter 5 and raising issues about changes in the risk premium (that the book pegs at 8.5% for the CAPM) with changes in market conditions. Highly recommended, $650 Billion Tax Hike by Stephen Moore (A15) Another opinion piece discussing likelihood of changes in dividend and capital gains tax treatment, factors we will discuss in the last two classes Goliaths Gain Momentum on Davids (C1) Good discussion using large versus small stock performance in comparison Whats Better in Accounting: Rules or Feel? (C1) Critical issue in accounting standards, an issue you may better appreciate after using reported data in this semesters project May 1, 2007 Icahn Bid for Motorola Seat Takes More Critical Tone (A4) A hostile effort to gain board representation on underperforming firms board detailed, a good example of corporate governance issues raised by vocal and organized minority shareholders Higher Private-Equity Tax Is Explored (A4) Dramatic change in tax could alter compensation and incentives of private-equity firms whose gains are now taxed at capital gains rate, not the income tax rate TPG Considers Selling 20% Stake, With Pension-Fund Twist (C1) A new wrinkle in sale of stock in private-equity management firms, with TPG considering sale of stock in itself to its clients, pension funds Does Pact Overvalue ISE (C12) Good illustration of back-of-the-envelope valuation of a firm, in this case a publicly held options exchange May 2, 2007 Making News: Murdochs Surprise Bid: $5 Billion for Dow Jones (A1) Amazing development in the restructuring newspaper business, offer is 67% premium over previous price, represents major financial information asset with possible synergies for New Corporation business reporting Cablevision Nears Deal With Dolans To Go Private for at Least $10.5 Billion (A1) Another taking of public corporation private, with a good discussion of free cash flow, important in the group project Dow Jones: the Premium Question (C1) Two major articles discuss Murdochs offer for Dow Jones, includes interesting history of the Wall Street Journal and importance of Bancroft family with a dual-share structure May 3, 2007 Cablevision Deal Faces Hurdles (A4) Minority owners are upset with Dolan family purchase of the firm Ahold Agrees to Sell U.S. Foodservice Unit (A4) Sale of division to private-equity consortium requires valuation of the divisions assets Bond Investors Lamaent (C1) Good story on how bonds are downgraded, causing losses to investors as yields increase, illustrating bond valuation principals studied earlier Independence Can Pay Off (C14) Great discussion of role of independent directors forcing higher value in sale of Comcast to family and private-equity firms     548 WSJ Readings Spring 2007    '     1 2 3 IJK]^qrs}~DEFYٽձձ퉁vkh^h8CJaJh=h^CJaJh=CJaJh=h=CJaJh^h^CJaJ hyh^hyh^CJaJhWkh^>*CJaJhyh^>*CJaJhqh^>*CJaJh^h^>*CJaJhh^CJaJh^CJaJh=h^CJaJ(  G H   2 3 JK]^gd^ 0^`0gd^ 0^`0gd^^ rs !QR}~5 0^`0gd^ 0^`0gd^ 0^`0gd= 0^`0gd=56EFXYghi_`  ;<JKgd^ 0^`0gd^ 0^`0gd^Yf;J I"W"X"["##$!%"%#%1%2%%y&z&d'e'$(%(&(,(-(4(5()))q))6*7*i*j*k*y*{*ཱུࢎ袅}rh5!hYCJaJhYCJaJh5!6CJaJh^h5!CJaJhu>*CJaJh5!CJaJh^huCJaJhuCJaJh"4CJaJh^h=CJaJh=CJaJhl}CJaJh^CJaJh^h^CJaJh^h^>*CJaJ)KghCD 2!3!H"I"W"X"####$$"%#% 0^`0gd^#%1%2%%%y&z&c'd'%(&(4(5())7*j*k*y*z*U+V+, ,,,[-\-j- 0^`0gd^{*T+U+Z-[-\-j-k-..m.n....50607080J0K011111 2!233333333J4K4M4_4444q8ƻڲƦ妝啂zzzh'CJaJh CJaJh^hI4CJaJhI4CJaJhI4>*CJaJh^h <>*CJaJhY>*CJaJh^hYCJaJhYCJaJh^h^>*CJaJh^h^CJaJh^h <CJaJh^CJaJh <CJaJ+j-k-....//607080J0K0001111!2"233333 0^`0gdI4 0^`0gd < 0^`0gd^33K4L444556666z7{777q8r888"99:::?;@; 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