Cox Communications, Inc, 1999 (CCI)

The following are the expected questions of the Case

1. What changes are occurring in the cable industry? Why has CCI undertaken so
many acquisitions recently?
2. Why is CCI acquiring Gannett? The Gannett acquisition is still under negotiation.
Is this acquisition a positive NPV project at a price of $2.7 billion?
3. Assuming that the Gannett acquisition goes through, estimate CCIs short-term
(1 years) and long-term (4 years) funding needs. How much of each funding
need must be met through external financing?
4. What constraints does Clement face in satisfying CCIs funding needs? You may
assume that CEI has mandated a 65% floor on their economic stake.
5. What is the menu of financing choices available to CCI? What are the costs and
benefits of each choice?
6. Analyze the solutions proposed in Exhibit 8. What is a FELINE PRIDES
security? What are the advantages/disadvantages to firms using this security?
Decompose this security into its debt and equity components. What,
economically, is a firm doing when it issues FELINE PRIDES?
7. Which solution in Exhibit 8 seems to satisfy the financing constraints determined
above and why