Philip Morris launched a takeover bid for Kraft, which Kraft argues is too low. The stock market responded positively to the announcement for Philip Morris but negatively for Kraft, indicating value creation for Philip Morris shareholders but not Kraft shareholders if the takeover is successful. Kraft has announced a restructuring plan to remain independent, but its value depends on careful examination of Kraft's financial figures and how successfully it can be implemented, as remaining independent may not create as much value as being taken over by Philip Morris.
Philip Morris launched a takeover bid for Kraft, which Kraft argues is too low. The stock market responded positively to the announcement for Philip Morris but negatively for Kraft, indicating value creation for Philip Morris shareholders but not Kraft shareholders if the takeover is successful. Kraft has announced a restructuring plan to remain independent, but its value depends on careful examination of Kraft's financial figures and how successfully it can be implemented, as remaining independent may not create as much value as being taken over by Philip Morris.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online from Scribd
Philip Morris launched a takeover bid for Kraft, which Kraft argues is too low. The stock market responded positively to the announcement for Philip Morris but negatively for Kraft, indicating value creation for Philip Morris shareholders but not Kraft shareholders if the takeover is successful. Kraft has announced a restructuring plan to remain independent, but its value depends on careful examination of Kraft's financial figures and how successfully it can be implemented, as remaining independent may not create as much value as being taken over by Philip Morris.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online from Scribd
1. Discuss the motivations of the takeover by Philip Morris. Do you
agree/disagree. Motivate your answer. 2. Kraft argues that the bid is too low. Comment on this response. 3. Explain the stock market responses at the date of the announcement. and show how wealth is distributed if the takeover materializes. 4. Is value being created in this takeover? (Hint: use the stock market responses of the two shares). 5. What is according to you the value of the restructuring plan of Kraft. Motivate carefully how this is determined. Examine also critically the presented financial figures.
In your solution put the emphasis on the last three questions. Good luck