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Energy Management System - Serbian

   

Added on  2020-01-07

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Strategic finance for managers1
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Table of ContentsTASK 1.................................................................................................................................................3PART A.................................................................................................................................................3Brief description of the two companies involved in the merger.......................................................3Initial offer and any subsequent offer...............................................................................................4Reaction of the target by management.............................................................................................6Defence mechanism..........................................................................................................................6Role of takeover panel......................................................................................................................6SHARE ANALYSIS.............................................................................................................................7AR calculations.................................................................................................................................7Value of beta.....................................................................................................................................9CAR calculations..............................................................................................................................9AR and CAR Graphs......................................................................................................................10Relationship with research..............................................................................................................14PART B...............................................................................................................................................15CONCLUSION..................................................................................................................................15REFERENCES...................................................................................................................................172
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TASK 1PART ABrief description of the two companies involved in the mergerMicrosoft Corporation is a multinational technology company, listed on NASDAQ andheadquartered in Redmond, Washington. Company design and manufacture computer software,personal computers, consumer electronics products and devices. It is one of the leading softwaredeveloping company that have a strong product portfolio such as Windows, Offices, Skype,Dynamics, Visual Audio and Servers etc. The aim of the company is to empower each and everyperson on the plant to achieveimprovements. On the other hand,LinkedIn is a social networking sites tradedon NYSE and operates worldwide.Company renders professional networkingservices especially to the recruiters andsales professionals to create their profiles tointeract with each other via socialnetworking. So that, users can interact eachother without the need of websitedevelopment. It is the world’s biggestprofessional networking company whichaimed at building a strong and growing business (McNeil, Frey & Embrechts, 2015). As a strategicand savvy move, Microsoft acquired LinkedIn Corporation worth $26.2 billion dollar. The mainpurpose of this merger is to jump towards software packages by having vast network of LikedInCorporation. It proves as one of the largest and riskiest acquisition in the corporate history. Onemain reason behind such behind such merger is to use LinkedIn wide network to deliver best valueto the customers in return for their money invested. There are number of parties involved in this merger as, Microsoft Corporation’s CertifiedExecutive Officer (CEO), named Satya Nadella announced a definitive agreement in 2016 toacquire LinkedIn valued at $196 each share while the total value of acquisition valued at $26.2billion. While, in the agreement, it has been decided that LikedIn Corp’s CEO, Jeff Weiner willremain in this position and report to the Satya Nadella (Gara, 2016.). Moreover, board memberssuch as Reid Hoffman, Board Chairman and Co-founder of LikedIn group are also involved in this3
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acquisition and give their acceptance for approval of merger. This merger gives an opportunity tothe Microsoft to bring significant level of changes to connect entire world (Lind & et.al., 2012).Moreover all the investors are also considered as important stakeholder involved in the mergerbecause without their approval, it is not possible to acquire LinkedIn by Microsoft Corp (4 Reasonswhy Microsoft wasted $26.2 billion to buy LikedIn, 2016). In addition to this, Chief FinancialOfficer (CFO) named Amy Hood, Chief Legal Officer (CLO) Brad Smith, Co-founder Bill Gates.Microsoft’s President, financial advisor Morgan Stanley, legal advisor Simpson Thacher andBarlett, LikedIn’s financial advisor and Qatalyst Partners, Allen & Company and legal advisorWilson Sonsini Goodrich & Rosati, are the parties who are involved in this acquisition (MicrosoftNews Center, 2016). LikedIn’s BOD and associated members given their consent on the offerpresented by Microsoft and deal is expected to close down at the end of the year. Initial offer and any subsequent offer On 13 June, 2016 at 8:30 AM, Microsoft and LinkedIn organized a joint conference call withthe investors to present initial acquisition offer via web telecast at Microsoft’s official website. Theweb telecast hosted by the company’s CEO, Amy Hood, President, Brad Smith on Microsoft NewsCenter. In the press release, a forward-looking statement has been released containing theinformation about potential impact of the offer such as result, inherent risk, legal proceeding, effecton business relationship and resultin the forthcoming period (Green,2016). Initially, MSFT announcedto takeover LinkedIn at lowerprice, but due to bidding fromsales force, it pushed deal pricesby 22% or roughly by $5 billionduring a period of two months. Itincreased acquisition price pershare to $196 (Green. 2016).Although, LI’s share price has been declined by 40% and generate lower yield than expectedresulted in net loss of $165 billion. But still, health premium offered by MSFT to 50% over thetrading price $133/share is a beneficial deal for LI, as a result, LI agreed to merge with Microsoft(Green. 2016). 4
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