Questions from text book Mergers, Acquistions and Other Restructuring Activities

Question

Questions from text book
Mergers, Acquistions and Other Restructuring Activities, 7th Edition
ISBN-13: 9780123854872
Author(s): DePamphilis, Donald

Case Study 11.3 Swiss Pharmaceutical Giant Novartis Takes Control of Alcon

Discussion Questions:
1. Speculate as to why Novartis acquired only 25% ownership stake in Alcon in 2008.

2. Why was the price ($181 per share) at which Novartis exercised its call option in 2010 to increase the stake in Alcon to 77% so much higher than what it paid ($143 per share) for an approximate 25% stake in Alcon in early 2008?

3. Alcon and Novartis shares dropped by 5% and 3% respectively, immediately following the announcement that Novartis would exercise its option to buy Nestle's majority holdings of Alcon shares. Explain why this may have hapened.

4. How do Swiss takeover laws compare to comparable U.S. laws? Which do you find more appropriate, and why?

5. Discuss how Novartis may have arrived at the estimate of $137 per share as the intrinsic value of Alcon shares. What are the key underlying assumptions? Do you believe the minority shareholders should receive the same price as Nestle? Explain your answer.

Explanation / Answer

Questions from text book Mergers, Acquistions and Other Restructuring Activities

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.