MCI takeover
MCI Takeover Battle: Case analysis questions
1. What are the strengths and weaknesses of Verizon, MCI, and Qwest? Where are the synergies in the proposed combination?
2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case, what is the value to MCI shareholders?
3. Merger arbitrage (or risk arbitrage) funds speculate on the completion of stock and cash mergers, typically buying the target and hedging the risk of the acquirer’s shares accordingly to exchange ratio in stock mergers. What positions would risk arbitragers take in this deal? How would their positions change if the board appears to favour Quest offer?
4. Consider the Worldcom-MCI merger and the Qwest-US West merger. Trying to avoid hindsight bias, should the board of MCI and US West have accepted these offers? What is the obligation to shareholders? Was that obligation fulfilled? What about WorldCom and Qwest? Did their shareholders benefit?
5. Which offer should MCI accept? Why?
6. What approach should Verizon take to win takeover context? Qwest?
MCI Takeover Battle: Case analysis questions
1. What are the strengths and weaknesses of Verizon, MCI, and Qwest? Where are the synergies in the proposed combination?
2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case, what is the value to MCI shareholders?
3. Merger arbitrage (or risk arbitrage) funds speculate on the completion of stock and cash mergers, typically buying the target and hedging the risk of the acquirer’s shares accordingly to exchange ratio in stock mergers. What positions would risk arbitragers take in this deal? How would their positions change if the board appears to favour Quest offer?
4. Consider the Worldcom-MCI merger and the Qwest-US West merger. Trying to avoid hindsight bias, should the board of MCI and US West have accepted these offers? What is the obligation to shareholders? Was that obligation fulfilled? What about WorldCom and Qwest? Did
1. What are the strengths and weaknesses of Verizon, MCI, and Qwest? Where are the synergies in the proposed combination?
2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case, what is the value to MCI shareholders?
3. Merger arbitrage (or risk arbitrage) funds speculate on the completion of stock and cash mergers, typically buying the target and hedging the risk of the acquirer’s shares accordingly to exchange ratio in stock mergers. What positions would risk arbitragers take in this deal? How would their positions change if the board appears to favour Quest offer?
4. Consider the Worldcom-MCI merger and the Qwest-US West merger. Trying to avoid hindsight bias, should the board of MCI and US West have accepted these offers? What is the obligation to shareholders? Was that obligation fulfilled? What about WorldCom and Qwest? Did their shareholders benefit?
5. Which offer should MCI accept? Why?
6. What approach should Verizon take to win takeover context? Qwest?
MCI Takeover Battle: Case analysis questions
1. What are the strengths and weaknesses of Verizon, MCI, and Qwest? Where are the synergies in the proposed combination?
2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case, what is the value to MCI shareholders?
3. Merger arbitrage (or risk arbitrage) funds speculate on the completion of stock and cash mergers, typically buying the target and hedging the risk of the acquirer’s shares accordingly to exchange ratio in stock mergers. What positions would risk arbitragers take in this deal? How would their positions change if the board appears to favour Quest offer?
4. Consider the Worldcom-MCI merger and the Qwest-US West merger. Trying to avoid hindsight bias, should the board of MCI and US West have accepted these offers? What is the obligation to shareholders? Was that obligation fulfilled? What about WorldCom and Qwest? Did