Case study Assignment from Advanced Corporate Finance

BANGOR UNIVERSITY

AND

MANAGEMENT DEVELOPMENT INSTITUTE OF SINGAPORE

Course : Bachelor of Science (Hons) in Business Studies & Finance

(BSFD1 1812A, BSFD2 1812A, BSFD5 1803A)

Module Code and Title : ASB3210 Advanced Corporate Finance (Semester 1)

Module Tutor : Mr Lim Kaim Soon

Assessment : Group Assignment

Due Date : 09 September 2019

Word Length : Maximum 3,300 words

Weighting within Module : 20% (100 marks)

Instructions:

The case:

On June 15, 2018, AT&T announced that it had acquired Time Warner.

You are required to work on this case study in groups of 3 to 5 students and you may choose

your group members.

News archives will be a main source of material for the case but you should also use your

course notes when evaluating news items and to provide a background for your analysis.

Please only submit one report for your group both electronically and in hard copy but do ensure

all your group members are included on the report.

Do ensure you reference your source materials appropriately. If you cite works in the report

they must be included in a reference section. If you use works but do not cite them you can

include them in a bibliography.

Out of total 20% of marks available for this assignment, 5% of the marks will be awarded for

the coherence of your report. Hence it is essential that you work as a group and not as

individuals putting together different sections without any thought as to how they fit together.

BSFD11812A, BSFD21812A, BSFD51803A_ASB3210 Advanced Corporate Finance (Semester 1),

Group Assignment: 09 September 2019 Page 2 of 2

Required

You need to answer all 5 questions. All questions carry equal marks.

1 How did the acquirer’s and target’s share price change on the announcement of the

deal and why? What was the combined change in value of the firms? Integrate your

answer into the discussion of the empirical evidence on takeover gains.

2 Explain, whether this is a horizontal or a vertical merger. What are the expected

benefits of this transaction? What are the challenges? How did the previous similar

deals in this industry fare?

3 The deal was announced before the 2016 Presidential Election. How did the outcome

of the election affect the prospects of completing the deal?

4 Explain the role played by the US, Brazilian and European antitrust regulators in this

deal. How do the regulators protect consumers’ interests in regard to this particular

deal? What conditions are set by the US Department of Justice in order to approve the

deal?

5 The deal was expected to be financed in part by debt issue. Discuss the reaction of the

major credit rating agencies and investors to this development. Was the debt issue

ultimately successful? Discuss.

END OF ASSIGNMENT