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FINS5538-Takeover Restructuring and Corporate Governance

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Assignment

Your task is to act as an investment bank advising a large corporation (or a financial buyer) interested in expansion/investment opportunities in the Australian market (ASX) with a likely M&A deal. To identify this deal, you need to scout the market (or a particular industry) to look for potential targets that may be undervalued or acquirer/target pairs that may have strong synergy potentials. It will be up to you to gather all information required on both the target and the acquirer. 

You should take the following steps to complete in the project: 

1. Identify a potential purchaser. These can be a strategic buyer (e.g., a corporation) or a financial buyer (e.g, an LBO fund). You do NOT have to justify why you pick this potential acquirer. There’s no geographic constraint on the acquirer.

2. Identify a company that would be a good acquisition target and explain why. (Steps 1 and 2 are interchangeable but it may be more logical to start with step  1. Note that your client will be the acquirer, NOT the target). The target must be an Australian firm listed on the ASX. The target must not be the target of a real acquisition attempt in the last 3 years.

3. Analyse the industry and competitive landscape.

4. Estimate and quantify the potential synergies of between the bidder and the target.

5. Conduct a valuation of the target company. Do a comparable company analysis and comparable deal analysis. Also do a DCF or APV valuation based upon forecasted free cash flows. Show that the value to a prospective acquirer exceeds the expected acquisition price. 6. Show the financial impact of the transaction on the bidder - in particular, capital structure impact and EPS accretion/dilution 

FINS5538-Takeover Restructuring and Corporate Governance

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