Chapter-8收購、兼并和重組課后題目

ApplyingRelative,AssetOriented,

andRealOptionValuationMethodstoMergersandAcquisitionsYouearnalivingbywhatyouget,butyoubuildalifebywhatyougive.—WinstonChurchillExhibit1:CourseLayout:Mergers,Acquisitions,andOtherRestructuringActivitiesPartIV:DealStructuringandFinancingPartII:M&AProcessPartI:M&AEnvironmentCh.11:PaymentandLegalConsiderationsCh.7:DiscountedCashFlowValuationCh.9:FinancialModelingTechniquesCh.6:M&APostclosingIntegrationCh.4:BusinessandAcquisitionPlansCh.5:SearchthroughClosingActivitiesPartV:AlternativeBusinessandRestructuringStrategiesCh.12:Accounting&TaxConsiderationsCh.15:BusinessAlliancesCh.16:Divestitures,Spin-Offs,Split-Offs,andEquityCarve-OutsCh.17:BankruptcyandLiquidationCh.2:RegulatoryConsiderationsCh.1:MotivationsforM&APartIII:M&AValuationandModelingCh.3:TakeoverTactics,Defenses,andCorporateGovernanceCh.13:FinancingtheDealCh.8:RelativeValuationMethodologiesCh.18:Cross-BorderTransactionsCh.14:ValuingHighlyLeveragedTransactionsCh.10:PrivateCompanyValuationLearningObjectivesPrimarylearningobjective:Toprovidestudentswithknowledgeofalternativestodiscountedcashflowvaluationmethods,includingMarketApproachComparablecompaniesComparabletransactionsSameindustryorcomparableindustryAssetorientedapproachTangiblebookvalueLiquidationvalueBreak-upvalueReplacementCostapproachWeightedaveragemethodSecondarylearningobjective:EnablestudentstounderstandhowrealoptionsapplytoM&AsApplyingMarket-Based(RelativeValuation)Methods1MVT=(MVC/VIC)xVITWhereMVT=MarketvalueoftargetcompanyMVC=MarketvalueofthecomparablecompanyC2VIC=MeasureofvalueforcomparablecompanyCVIT=MeasureofvalueforcompanyT(MVC/VIC)=Marketvaluemultipleforthecomparablecompany1Comparablecompaniesmayincludethosewithprofitability,risk,andgrowthcharacteristicssimilartothetargetfirm;theyarenotnecessarilyfoundinthesameindustryasthetargetfirm.RiskmaybemeasuredbythebetaandtheD/EorD/TCratios.2Toidentifycomparablefirms,calculatecorrelationcoefficientswithrespecttorevenue,profit,orcashflowsoffirmsinthesameorsimilarindustries.RelationshipBetweenDCFand

MarketMultiplesPerpetuityDCFModelandP(pricepershare)/E(earningspershare)ratios:P=E/ke(perpetuitymodel),dividingbothsidesbyEgivesP/E=$1/ke,whichistheamountinvestorsarewillingtopayfor$1ofearningsinperpetuityex.IfE=$1,theearningspayoutratiois100%,andkeis10%,thenP/E=$1/.10=$10perdollarofearningsConstantGrowthDCFModelandP/Eratios:PV=E(1+g)/(ke–g)(constantgrowthmodel),dividingbothsidesbyEP/E=$1(1+g)/(ke–g),theamountinvestorsarewillingtopayfor$1ofearningsgrowingataconstantgrowthrateg.ex.IfE=$1,theearningspayoutratiois100%,keis10%,andtheearningsgrowthrateis5%,thenP/E=$1x1.00x(1.05)/(.10-.05)=$21perdollarofearnings.KeyPoint:WhencomparingfirmswithdifferentP/Eratios,whichismoreattractivedependsontheexpectedearningsgrowthrate,payoutratio,andrateatwhichearningscanbereinvested.Market-BasedMethods:ComparableCompanyExampleExhibit8-1.ValuingRepsolYPFUsingComparableIntegratedOilCompaniesTargetValuationBasedonFollowingMultiples(MVC/VIC):ComparableCompanyTrailingP/E1ForwardP/E2Price/SalesPrice/BookAverageCol.1Col.2Col.3Col.4Col.1-4ExxonMobilCorp(XOM)11.258.731.173.71BritishPetroleum(BP)9.187.680.692.17ChevronCorp(CVX)10.798.050.912.54RoyalDutchShell(RDS-B)7.368.350.611.86ConocoPhillips(COP)11.926.890.771.59TotalSA(TOT)8.758.730.802.53EniSpA(E)3.177.910.360.81PetroChinaCo.(PTR)11.9610.751.752.10AverageMultiple(MVC/VIC)Times9.308.390.882.16RepsolYPFProjections(VIT)3$4.38$3.27$92.66$26.49EqualsEstimatedMkt.ValueofTarget3

$40.73$27.44$81.54$57.22$51.731Trailing52weekaverage.2Projected52weekaverage.3BillionsofDollars.KeyPoints:1.Firmvaluationdifferssignificantlydependingonvaluationmultipleused.2.Valuationestimatesrequireadditionofapurchasepricepremium.Market-BasedMethods:

RecentTransactions’Method1Calculationsimilartocomparablecompanies’method,exceptmultiplesusedtoestimatetarget’svaluebasedonpurchasepricesofrecenttransactionsofcomparablecompanies.MVT=(MVRT/VIRT)xVITWhereMVT=MarketvalueoftargetcompanyTMVRT=MarketvalueoftherecentlyacquiredcomparablecompanyRTVIRT=MeasureofvalueforrecentlyacquiredcomparablecompanyRTVIT=MeasureofvaluefortargetcompanyT(MVRT/VIRT)=MarketvaluemultiplefortherecentlyacquiredcomparablecompanyRTMostaccuratemethodwheneverthetransactionistrulycomparableandveryrecent.Majorlimitationisthattrulycomparablerecenttransactionsarerare.Valuationsbasedonthismethodalreadyincludeapurchasepricepremium1Alsocalledprecedentmethod.Market-BasedMethods:

SameorComparableIndustryMethodMultiplytarget’searningsorrevenuesbymarketvaluetoearningsorrevenueratiosfortheaveragefirmintarget’sindustryoracomparableindustry.MVT=(MVAF/VIAF)xVITWhereMVT=MarketvalueoftargetfirmMVAF=Marketvalueofaveragefirm(AF)intargetfirm’sorcomparableindustryVIAF=Measureofvalueforaveragefirmintargetfirm’sorcomparableIndustryVIT=MeasureofvaluefortargetcompanyT(MVAF/VIAF)=Marketvaluemultiplefortheaveragefirmintargetfirm’sorcomparableindustryPrimaryadvantageistheeaseofuseandavailabilityofdata.Disadvantagesincludepresumptionindustrymultiplesareactuallycomparableandanalysts’projectionsareunbiased.RequiresadditionofpurchasepricepremiumPEGRatioFirmAandFirmBhaveP/Esof20and15,respectively.Whichismoreattractive?PEGRatiousedtoadjustrelativevaluationmethodsfordifferencesingrowthratesamongcomparablefirms.Helpfulindeterminingwhichofanumberofdifferentfirmsinsameindustryexhibitingdifferentgrowthratesmaybethemostattractive.

(MVT/VIT)=AandVITGR

MVT=AxVITGRxVITWhereA=Marketpricetovalueindicatorrelativetothegrowthrateofvalueindicator(e.g.,(P/E)/EPSgrowthrate)MVT=MarketvalueoftargetVIT=Valueindicatorfortarget(e.g.,EPS)VITGR=Projectedgrowthrateinvalueindicator(e.g.,EPS)1FirmswhosePEGratios>1consideredovervalued;PEGratios<1consideredundervalued1ValidforVITGR>0.ForVITGR=0or<0,firmvaluewillnotchangeorwilldecline.AnanalystisaskedtodeterminewhetherBasicEnergyService(BES)orCompositeProductionServices(CPS)ismoreattractiveasanacquisitiontarget.Bothfirmsprovideengineering,construction,andspecialtyservicestotheoil,gas,refinery,andpetrochemicalindustries.BESandCPShaveprojectedannualearningspersharegrowthratesof15percentand9percent,respectively.BES’andCPS’currentearningspershareare$2.05and$3.15,respectively.ThecurrentsharepricesasofJune25,2008forBESis$31.48andforCPXis$26.Theindustryaverageprice-to-earningsratioandgrowthrateare12.4and11percent,respectively.Basedonthisinformation,whichfirmisamoreattractivetakeovertarget(i.e.,moreundervalued)asofthepointintimethefirmsarebeingcompared?IndustryaveragePEGratio:1(MVT/VIT)/VITGR=A=12.4/11=1.1273BES:Impliedshareprice=AxVITGRxVIT=1.1273x15x$2.05=$34.66CPX:Impliedshareprice=AxVITGRxVIT=1.1273x9x$3.15=$31.96Answer:ThedifferencebetweentheimpliedandactualsharepricesforBESandCPXis$3.18(i.e.,$34.66-$31.48)and$5.96($31.96-$26.00),respectively.CPXismoreundervaluedthanBESatthatmomentintimeandthereforeisthemoreattractivetakeovertarget.1SolvingMVT=AxVITGRxVITusinganindividualfirm’sPEGratioprovidesthefirm’scurrentsharepriceinperiodT,sincethisformulaisanidentity.AnindustryaveragePEGratiomaybeusedtoprovideanestimateofthefirm’sintrinsicvalue.Thisimplicitlyassumesthatthetargetfirmandtheaveragefirmintheindustryexhibitthesamerelationshipbetweenprice-to-earningsratiosandearningsgrowthrates.ApplyingthePEGRatioAsset-BasedMethods:

TangibleBookValueTangiblebookvalue(TBV)=(totalassets-totalliabilities-goodwill)MVT=(MVC/VICTBV)xVITTBVWhereMVT=MarketvalueoftargetcompanyTMVC=MarketvalueofthecomparablecompanyCVICTBV=TangiblebookvalueforcomparablecompanyCVITTBV=TangiblebookvaluefortargetcompanyT(MVC/ICTBV)=MarketvaluemultipleforthecomparablecompanyOftenusedforvaluingFinancialservicesfirmswheretangiblebookvalueisprimarilycashorliquidassetsDistributionfirmswherecurrentassetsconstitutealargepercentageoftotalassetsValuingCompaniesUsingAssetBasedMethods:PracticeProblemIngramMicrodistributesinformationtechnologyproductsworldwide.Thefirm’ssharepriceon8/21/08was$19.30.Projected5-yearannualnetincomegrowthis9.5%andthefirm’sbetais.89.Shareholders’equityis$3.4billionandgoodwillis$.7billion.Ingramhas172million(.172billion)sharesoutstanding.ThefollowingfirmsrepresentIngram’sprimarycompetitors.NotethatSynnexCorporationcanbeviewedasanoutlier.MarketValue/TangibleBookValueBetaProjected5-YearNetIncomeGrowthRate(%)TechData.91.9011.6SynnexCorporation.70.406.9Avnet1.011.0912.1Arrow.93.9713.2Basedonthisinformation,whatisIngram’stangiblebookvaluepershare(VIT)?Whatistheappropriateindustryaveragemarketvaluetotangiblebookvalueratio(MVIND/VIIND)?EstimatetheimpliedmarketvaluepershareforIngram(MVT)usingtangiblebookvalueasavalueindicator.Basedonthisanalysis,isIngramunder-or-overvaluedcomparedtoit8/21/08shareprice?Asset-BasedMethods:LiquidationMethodValueassetsasifsoldinan“orderly”fashion(e.g.,9-12months)anddeductvalueofliabilitiesandexpensesassociatedwithassetdisposition.Whilevarieswithindustry,Receivablesoftensoldfor80-90%ofbookvalueInventoriesmightrealize80-90%ofbookbookvaluedependingondegreeofobsolescenceandconditionEquipmentvaluesvarywidelydependingonageandconditionandpurpose(e.g.,specialpurpose)BookvalueoflandmayunderstatemarketvaluePrepaidassetssuchasinsurancecanbeliquidatedwithaportionofthepremiumrecovered.Asset-BasedMethod:Break-UpValueTargetviewedasseriesofindependentoperatingunits,whoseincome,cashflow,andbalancesheetstatementsreflectintra-companysales,fully-allocatedcosts,andoperatingliabilitiesspecifictoeachunitAfter-taxcashflowsarevaluedusingmarket-basedmultiplesordiscountedcashflowsanalysistodetermineoperatingunit’sestimatedenterprisevalueTheunit’sequityvalueisdeterminedbydeductingoperating/non-operatingliabilitiesfromestimatedenterprisevalueAggregateequityvalueofthebusinessisdeterminedbysummingequityvalueofeachoperatingunitlessunallocatedliabilitiesheldatcorporatelevel(e.g.,debt)andbreak-upcosts(e.g.,accountingandinvestmentbankingfees)ReplacementCostMethodAlltargetoperatingassetsareassignedavaluebasedonwhatitwouldcosttoreplacethem.Eachassetistreatedasifnoadditionalvalueiscreatedbyoperatingtheassetsaspartofagoingconcern.Eachasset’svalueissummedtodeterminetheaggregatevalueofthebusiness.Thisapproachislimitedifthefirmishighlyprofitable(suggestingahighgoingconcernvalue)orifmanyofthefirm’sassetsareintangible.WeightedAverageValuationMethodAnanalysthasestimatedthevalueofacompanyusingmultiplevaluationmethodologies.Thediscountedcashflowvalueis$220million,comparablerecenttransactions’valueis$234million,thecomparablecompanyaverageP/E-basedvalueis$224millionandthefirm’sbreak-upvalueis$200million.Thepurchasepricepaidfortherecentcomparabletransactionincludeda20%premium.Theanalysthasgreaterconfidenceincertainmethodologiesthanothers.Estimatetheweightedaveragevalueofthefirmusingallvaluationmethodologiesandtheweightsorrelativeimportancetheanalystgivestoeachmethodology.EstimatedValue($M)1RelativeWeightWeightedAvg.($M)264(DCFMethod).3079.2234(RecentTransactionsMethod).4093.6268.8(ComparableCo.P/EMethod).2053.8240(Break-upValueMethod).1024.01.00250.61NotethattheDCF,P/E-based(comparablecompany),andbreak-upvalueswereincreasedby1.2toreflectthe20%premiumreflectedintherecentcomparabletransactionsestimate.RealOptionsasAppliedtoM&AsRealoptionsrefertomanagement’sabilitytoadoptandlaterrevisecorporateinvestmentdecisions(e.g.,acquisitions)Optionstoexpand(i.e.,accelerateinvestment)AcquireracceleratesinvestmentintargetafteracquisitioncompletedduetobetterthananticipatedperformanceofthetargetOptionstodelay(i.e.,postponetimingofinitialinvestment)AcquirerdelayscompletionofacquisitionuntilapatentpendingreceivesapprovalOptionstoabandon(i.e.,divestorliquidateinitialinvestment)AcquirerdiveststargetfirmduetounderperformanceandrecoversaportionofitsinitialinvestmentAlternativeRealOption

ValuationMethodsDevelopadecisiontreeforwhichtheNPVofeach“branch”representsthevalueofalternativerealoptions.Theoption’svalueisequaltodifferencebetweentheNPVincludingtherealoptionandtheNPVwithouttherealoption.TreattherealoptionsasfinancialoptionsandvalueusingtheBlack-Scholesmethod.OptiontoexpandordelayarevaluedascalloptionsandaddedtotheNPVoftheinvestmentwithouttheoption.OptiontoabandonisvaluedasaputoptionandaddedtotheNPVoftheinvestmentwithouttheoption.KeyPoints:TotalNPV=NPVWithoutOption+OptionValueandOptionValue=TotalNPV–NPVWithoutOptionMicrosoftRealOptionsDecisionTreein2008AttemptedTakeoverofYahooBaseCase:MicrosoftOffersToBuyAllYahooSharesin2008OptiontoexpandcontingentonsuccessfulIntegrationofYahoo&MSNOptiontopostponecontingentonYahoo’srejectionofofferOptiontoabandoncontingentonfailuretointegrateYahoo&MSNPurchaseYahooonlinesearchonly.Buyremainingbusinesseslater.Enterlong-termsearchpartnership.Implementedi