The Loewen Group Case Service Corporation International (SCI) has made an offer to purchase Loewen Group. The offer consists of paying $43 per share in a tax-free transaction. The total number of common shares at year end in 1995 (in thousand) are 48‚168. The cost of purchasing Loewen would be $43 x 48‚168 (in thousand) = $2‚071‚224‚000. The total amount of equity and debt for Loewen Group is approximately $3B. This includes the total non-current liabilities at approximately $1.15B. What
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The Loewen Group Memo To: Ray Loewen From: Dave Bassel cc: Professor Date: Re: SCI offer Dear Ray‚ Thank you for the opportunity to share my analysis with you regarding this most important topic. After giving careful consideration to the SCI offer and analyzing the bid from the view point of all Loewen stakeholders‚ I believe a rejection of the SCI offer is clearly warranted. We need to consider the long-term implications this would have on our stakeholders. Would they be better or worse off
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The Loewen Group Inc. (Abridged) Case Summary After decades’ dramatically expansion‚ the Loewen Group Inc‚ the second largest death care company in North America‚ went downhill abruptly in 1998. Compared with those in 1997‚ its net income decreased from $42.7 million to $599 million in deficit‚ meanwhile‚ its long-term debt due in one year increased by more than 2000%‚ from $43.5 million to $874.1 million‚ and total liabilities exceeded the total assets by $326.8 million (in US dollar). Because
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Loewen Group Over the last two decades Loewen Group‚ a death care provider‚ had been growing by acquiring small independent funeral homes and cemeteries in densely populated areas but in recent years the company had also acquired several large established funeral chains. Over the last five years alone‚ Loewen had embarked on an aggressive growth strategy which accounted for consolidated revenues’ growth of nearly 30% a year on average from $303 billion to over $1.1 billion. This growth through
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The Loewen Group Inc. Case Report – Session 3 Group 6 Executive Summary This report provides a qualitative analysis of the Loewen case study‚ starting from the excessive debt policy used in its expansion and ending with huge debt ratios and bankruptcy. The analysis includes the effect of the company’s policy and the financial distress it caused and results of such a financial condition. Method of Analysis: For the analysis we have used the historical financial data of the company‚ the
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Opportunities Threat of new entrants: The barriers to entry are high due to high fixed costs‚ lack of history in the local community‚ zoning regulation‚ and "not-in-my-back-yard" protests. Power of suppliers: Funeral consolidators such as Loewen group can put a great deal of pressure on suppliers to reduce prices. Power of buyers: The funeral home is usually the buyers first point of contact‚ therefore the funeral home has first chance at selling all related services and supplies.
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Xavier Perry 5/22/2015 Section B Takeover (2) In a globalized world‚ learning a foreign language has become increasingly important. Do you agree or disagree? Explain your answer‚ and use facts‚ statistics and studies to supplement your views. Learning a foreign language has become almost a necessity in today’s modern society.Technological advances have greatly increased our ability to being able to connect with a vast array of different people from different parts of the world. Millions
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The effects of social class in America James W. Loewen‚ essay “The Land of Opportunity‚” discusses how many times Americans don’t know about social classes and the effects they have on society. Loewen argues that the common American people aren’t given equal opportunity in this day in age. He says that American history books have great influenced what we see about the class system because a great deal of history is often left out. James Loewen begins “The Land of Opportunity” by saying that teenagers
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Hostile takeovers vs. friendly takeovers Emma Lilja‚ Adeniyi Ajayi‚ Andreas Thomasson‚ Mahfuj Khan‚ Nayeem Rahman and Mohammed Kalam Andreas Stenius‚ Arcada - University of Applied Sciences 8.5.2012 Degree Programmes: International business and Financial Management. Course name: Corporate Structures Executive Summary This project report provides comprehensive information about corporate structures; focusing on friendly and hostile takeovers‚ introducing them through definitions and some
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1) Why is Flagstar in financial distress? When possible‚ back your claims with data. Signs of financial distress • The company lost money almost every year since its leveraged buyout by Coniston Partners in 1989. The income generated was not sufficient to service the interest expenses of the company which stood at $2.62B in 1996. From Exhibit 1‚ we can say that interest coverage ratio computed as EBIT / Interest Expense was 1.31 in 1989 and has been decreasing over years and currently stands at
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